EXHIBIT 10.7
THE COSMETIC CENTER EMPLOYEE RETIREMENT PLAN
Amended and Restated
Effective as of April 25, 1997
TABLE OF CONTENTS PAGE
ARTICLE 1 Definitions 2
ARTICLE 2 Participation 16
ARTICLE 3 Basic and Matching Contributions 20
ARTICLE 4 Accounts and Designation of Investment Funds 25
ARTICLE 5 Vesting 34
ARTICLE 6 Normal Withdrawals During Employment 37
ARTICLE 7 Withdrawals for Hardship 40
ARTICLE 8 Distributions on Termination of Employment 43
ARTICLE 9 Payment of Benefits 45
ARTICLE 10 Beneficiary Designation 50
ARTICLE 11 Administration 53
ARTICLE 12 Trust Agreement 60
ARTICLE 13 Amendment or Merger 61
ARTICLE 14 Termination of the Plan 63
ARTICLE 15 Miscellaneous 65
ARTICLE 16 Leased Employees 71
ARTICLE 17 Limitation on Maximum Benefits and Contributions 73
Under All Plans
ARTICLE 18 "Top Heavy" Provisions, Etc. 75
ARTICLE 19 Termination, etc. Prior to Amendment 81
ARTICLE 20 401(k) Deferral and 401(m) Contributions Tests 82
ARTICLE 21 Rollover Contributions 87
ARTICLE 22 Direct Rollover 89
SCHEDULE OF EMPLOYERS
THE COSMETIC CENTER EMPLOYEE RETIREMENT PLAN
PREAMBLE
Effective January 1, 1978, a predecessor of The Cosmetic Center, Inc.,
a Delaware corporation, adopted the L.R.W. Profit Sharing Plan. Such Plan was
subsequently amended from time to time.
An amendment effective July 1, 1993 changed the name of the Plan to
The Cosmetic Center Employee Retirement Plan and the Plan sponsor was changed,
effective July 1, 1993, to The Cosmetic Center, Inc. (the "Company").
The Plan is a profit-sharing plan which contains a cash or deferred
arrangement described in section 401(k) of the Internal Revenue Code of 1986,
as amended.
Effective April 25, 1997, The Plan is hereby amended and restated to
take into account the purchase of a majority interest in the Cosmetic Center,
Inc. by Revlon, Inc., a Delaware corporation, and the merger of Prestige
Fragrance, Inc. into The Cosmetic Center, Inc.
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ARTICLE 1
Definitions
When used in the Plan, the following terms shall have the designated
meanings, unless a different meaning is clearly required by the context:
1.1 Accounts. A Participant's Basic Account, Pre-IPO Matching
Contributions Account, Post-IPO Matching Contributions Account, Old Profit
Share Account, New Profit Share Account, Company Matching Account, Company
Account or Rollover Account or the aggregate thereof as the context may
indicate.
1.2 Affiliate. Any business entity, other than an Employer, whether or
not incorporated, which at the time of reference controls, is controlled by or
is under common control with an Employer (within the meaning of section 414(b)
or 414(c) of the Code or, effective January 1, 1980, section 414(m)(2) of the
Code, or as effective December 31, 1983, section 414(m)(5) of the Code, or as
effective July 18, 1984, section 414(o) of the C ode, and, for purposes of
applying Article 17 of the Plan, section 415(h) of the Code). In accordance
with rules which the Administrative Committee may adopt from time to time, the
term "Affiliate" may also include any joint venture or other business
organization with which the Company is affiliated, or in which it has an
interest or with which it has business dealings, either for all purposes of the
Plan or for such limited purposes as the Administrative Committee may specify
in such rules, and subject to such conditions and limitations (if any) as the
Committee may specify in such rules.
1.3 Appropriate Form. A form prescribed by the Committee for a
particular purpose specified in the Plan.
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1.4 Basic Account. The aggregate of a Participant's Employee 401(k)
Account and his Post-Tax Contributions Account.
1.5 Basic Contributions. Contributions made by an Employer or
Participant in accordance with the provisions of Section 3.1 and/or 3.2,
respectively.
1.6 Beneficiary. The person or persons entitled to benefits under the
Plan following a Participant's death, pursuant to Article 10.
1.7 Break in Service. A Severance Period of not less than twelve (12)
consecutive months. In the case of an individual who is absent from work for
maternity or paternity reasons (whether or not the employment relation-ship has
terminated) (or for any other reason which entitles such individual to a FMLA
leave (as described below)), the first twelve (12) consecutive months of such
absence (or such lesser period of the FMLA leave) shall not be included in a
Break in Service, but only to the extent required by applicable law. For
purposes of this Section 1.7, an absence from work for maternity or paternity
reasons means a cessation of active employment after 1984 which commences and
continues (a) by reason of the pregnancy of the individual, (b) by reason of
the birth of a child of the individual, (c) by reason of the placement of a
child with the individual in connection with the adoption of such child by such
individual, or (d) for purposes of caring for such child for a period beginning
immediately following such birth or placement.
For purposes of this Section 1.7, an absence from work for a
FMLA leave means a cessation of active employment (and continuous absence from
such employment) commencing on or after August 5, 1993, for a leave of absence
for one or more of the following reasons: (a) because of the birth of a son or
daughter of the individual and in order to care for such son or
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daughter; (b) because of the placement of a son or daughter with the individual
for adoption or xxxxxx care; (c) in order to care for the spouse, or a son,
daughter, or parent of the individual, if such spouse, son, daughter, or parent
has a serious health condition, or (d) because of a serious health condition
that makes the individual unable to perform the functions of the position of
such individual, in each case (a) through (d) which entitles the individual to
be granted a leave of absence under the provisions of the Family and Medical
Leave Act of 1993, as it may be amended from time to time, and the regulations
promulgated thereunder.
Nothing in this Section 1.7 shall be construed to grant an employee
any right to a leave of absence for any reason.
1.8 Board of Directors. The Board of Directors of the Company, or any
duly authorized committee thereof
1.9 Committee. The Administrative Committee or the Investment
Committee, as the context may indicate, provided for in Article 11.
1.10 Company Account. A separate sub-account maintained for each
Participant which reflects his share of the Trust and attributable to Company
Contributions made on his behalf.
1.11 Company Contributions. Employer contributions not to exceed 6% of
a Participant's Compensation. Such contributions (if any) shall be made in the
Employer's sole discretion.
1.12 Company Matching Contributions. Matching Contributions which are
attributable to payroll periods ending on or after April 25, 1997.
1.13 Company Stock. Shares of common stock of the Company.
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1.14 Company Stock Matching Contributions Account. A separate
sub-account maintained for each Participant which reflects his share of the
Trust Fund attributable to Matching Contributions made in the form of Company
Stock.
1.15 Compensation. As used herein, the term Compensation shall mean;
1.15.1 The amount reported by an Employer on an Employee's IRS Form
W-2 for a Plan Year for services performed as an Eligible Employee,
determined before giving effect to (a) any Participation Agreement under
this Plan or (b) any similar agreement under any plan described in section
125 of the Code, but not including: (i) deferred compensation,
contributions under the Plan or any other program of fringe benefits, or
other additional remuneration; (ii) any remuneration for services
performed while an Employee is employed primarily to render services
within the jurisdiction of a union and with respect to which compensation,
hours of work or conditions of employment are determined by collective
bargaining with such union; provided, however, that any such remuneration
not otherwise excluded from Compensation by the provisions of this Section
1.15.1 shall be treated as Compensation if, and to the extent, that the
applicable collective bargaining agreement expressly so provides.
1.15.2 For purposes of Section 20.4, Compensation shall include
Pre-Tax Contributions.
1.15.3 In no event shall the Plan take into account Compensation in
excess of $200,000 for Plan Years beginning after 1988, or in excess of
$150,000 for Plan Years beginning after 1993, each as adjusted under
sections 401(a)(17) and 415(d) of the Code, for any Employee in any Plan
Year. For purposes of applying the $200,000 and $150,000
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limitations, the Compensation of certain Employees shall include the
Compensation of any family member, as prescribed by section 414(q)(6),
except that in applying such rules, the term "family" shall include only
the Spouse and any lineal descendants of an Employee who have not attained
age 19 before the close of the Plan Year.
1.16 Disability. Entitlement to disability benefits under the Federal
Social Security Act, provided satisfactory information of such entitlement is
provided to the Administrative Committee.
1.17 Early Retirement Age. The first day of any calendar month after a
Participant's 55th birthday, provided the Participant has completed at least
five (5) years of Service with the Employer.
1.18 Eligible Employee. Any Employee of an Employer who meets all of
the following requirements:
1.18.1 He is at least twenty-one (21) years of age;
1.18.2 He is employed in a division, subdivision, plant,
location or other identifiable group of Employees to which his
Employer has extended the Plan; provided, however, that in
determining the divisions, subdivisions, plants, locations or groups
of Employees to which the Plan shall be extended, the Employer shall
not discriminate in favor of Highly Compensated Employees so as to
prevent the Plan from qualifying under section 401 (a) of the Code.
1.18.3 If: (i) he is employed primarily to render services
within the jurisdiction of a union, (ii) his compensation, hours of
work or conditions of employment are determined by collective
bargaining with such union, and (iii) an applicable collective
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bargaining agreement expressly provides that he shall be eligible to
participate in the Plan, then he shall be entitled to participate in
the Plan only to the extent and on the terms and conditions specified
in such collective bargaining agreement; and
1.18.4 He is not a nonresident alien.
1.19 Employee. An employee of an Employer or Affiliate.
1.20 Employer 401(k) Account. A sub-account of a Participant's Basic
Account which reflects his share of the Trust Fund attributable to his Pre-Tax
Contributions.
1.21 Employer. The Company and its subsidiaries and affiliates listed
on the Schedule attached hereto and any other corporation, partnership or other
entity which has adopted the Plan with the approval of the Board of Directors.
1.22 Employer Contributions. Pre-Tax Contributions and Matching
Contributions.
1.23 Employment Date. The first day on which an Employee is credited
with an Hour of Service with an Employer or an Affiliate.
1.24 Entry Date. Each January 1, April 1, July 1, and October 1; and
any other date established as an "Entry Date" by the Administrative Committee
with respect to Eligible Employees generally, or such specified group of
Eligible Employees as the Administrative Committee may prescribe in its
discretion.
1.25 ERISA. The Employee Retirement Income Security Act of 1974, as
amended from time to time.
1.26 Highly Compensated Employee. A "highly compensated employee" as
the term is defined in section 414(q) of the Code and the Treasury Regulations
thereunder.
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1.27 Hour of Service. Subject to the equivalency rules of Section
2.1.4, an Employee is credited with an Hour of Service pursuant to the
following rules, determined without duplication:
(i) Each hour for which an Employee is paid, or entitled to
payment, by an Employer, for the performance of duties for the
Employer;
(ii) Each hour for which an Employee is paid, or entitled
to payment, by an Employer on account of a period of time during
which no duties are performed due to vacation, holiday, illness,
incapacity (including disability), layoff, jury duty, military
duty or leave of absence. No more than 501 Hours of Service will
be credited under this paragraph for any single continuous
period (whether or not such period occurs in a single
computation period). Hours of Service under this paragraph will
be calculated and credited pursuant to section 2530.200b-2 of
the Department of Labor Regulations which are incorporated
herein by this reference;
(iii) Each hour for which back pay, irrespective of
mitigation of damages, is either awarded or agreed to by an
Employer. These hours will be credited to the Employee for the
Year of Service or Plan Years to which the award or agreement
pertains rather than the Year of Service or Plan Year in which
the award, agreement or payment is made;
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(iv) In addition to service with an Affiliate, Hours of
Service will also be credited for any individual considered an
employee for purposes of this Plan under section 414(n) of the
Code;
1.28 Investment Fund. A portion of the Trust Fund which is separately
invested, as provided in Section 4.5.
1.29 Matched Contributions. (a) For periods prior to January 1, 1984,
"Employee Contributions" (as that term was defined in the Plan immediately
prior to January 1, 1984) and (b) for periods on or after January 1, 1984, the
aggregate Pre-Tax Contributions and Post-Tax Contributions to a Participant's
Basic Account for any month not in excess of six percent (6%) of the
Participant's Compensation for that month.
1.30 Matching Contributions. (a) "Employer Contributions" (as that
term was defined in the Plan immediately prior to January 1, 1984) made under
the Plan for periods prior to January 1, 1984 and (b) contributions made by an
Employer under Section 3.6 of this Plan for months ending after December 31,
1983, based on the amount of Matched Contributions made for or by the
Participant for any such month.
1.31 Matching Contributions Account. A separate account maintained for
each Participant which reflects his share of the Trust Fund attributable to
Matching Contributions. The Matching Contributions Account shall consist of
three sub-accounts: the Pre-IPO Matching Contributions Account, the Post-IPO
Matching Contributions Account and the Company Stock Mastching Contributions
Account.
1.32 '96 IPO. The date of the 1996 initial public offering of the
Class A common stock of Revlon, Inc., which for purposes of this Plan shall be
deemed to be March 1, 1996.
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1.33 New Profit Share Account. Employer Contributions made on behalf
of a Participant for Plan Years beginning after December 31, 1992.
1.34 Normal Retirement Age. A Participant's sixty-fifth (65th)
birthday.
1.35 Old Profit Share Account. Employer contributions made on behalf
of a Participant for Plan Years beginning prior to January 1, 1993.
1.36 Participant. Any present Eligible Employee who has become a
Participant in this Plan in accordance with Article 2, and any former Eligible
Employee who (or whose Beneficiary) has an undistributed Account under the
Plan.
1.37 Participation Agreement. An agreement by an Eligible Employee in
an Appropriate Form (a) to reduce his cash base pay in order to share in
Pre-Tax Contributions under the Plan, as provided in Section 3.1, and/or (b) to
make Post-Tax Contributions to the Plan, in accordance with the provisions of
Section 3.2.
1.38 Plan. The Cosmetic Center Employee Retirement Plan.
1.39 Plan Year. January 1 through December 31.
1.40 Post-IPO Matching Contributions. Matching Contributions which are
attributable to payroll periods ending on or after the first day of the
calendar month coincident with or next following the date of the '96 IPO.
1.41 Post-IPO Matching Contributions Account. A separate sub-account
maintained for each Participant which reflects his share of the Trust Fund
attributable to Post-IPO Matching Contributions made on behalf of such
Participant.
1.42 Post-Tax Contributions. Basic Contributions made by a Participant
in accordance with the, provisions of Section 3.2.
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1.43 Post-Tax Contributions Account. A subaccount of a Participant's
Basic Account which reflects his share of the Trust Fund attributable to his
(a) Post-Tax Contributions and (b) Employee Contributions (as that term was
defined in the Plan immediately prior to January 1, 1984) for periods prior to
1984.
1.44 Pre-IPO Matching Contributions. Matching Contributions which are
attributable to payroll periods ending before the first day of the calendar
month coincident with or next following the date of the '96 IPO.
1.45 Pre-IPO Matching Contributions Account. A separate sub-account
maintained for each Participant which reflects his share of the Trust Fund
attributable to Pre-IPO Matching Contributions made on behalf of such
Participant.
1.46 Pre-Tax Contributions. Basic Contributions made by an Employer
for the benefit of a Participant in accordance with the provisions of Section
3.1.
1.47 Reemployment Date. The date on which an employee first completes
an Hour of Service after a Termination of Employment.
1.48 Revlon Stock. The Class A common stock of Revlon, Inc., par value
$.01 per share.
1.49 Rollover Account. A separate account maintained for a Participant
which reflects his share of the Trust Fund attributable to his prior
participation in another plan from which assets were transferred to this Plan.
1.50 Savings Fund. The Investment Fund described in Section 4.5.1.
1.51 Service. Subject to Sections 2.2 and 5.3, the aggregate of the
following:
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1.51.1 Each period from an employee's Employment Date (or
Reemployment Date) to his next Termination of Employment, and
1.51.2 If any employee shall perform an Hour of Service within
twelve (12) months of his Termination of Employment, the period from
such Termination of Employment to such Hour of Service. Service shall
be measured in whole years and fractions of a year in months. Any
fraction of a month remaining shall be rounded up to the nearest
whole month.
1.52 Severance Period. Each period from an employee's Termination of
Employment to his next Reemployment Date.
1.53 Spouse. A Participant's legal spouse. A former spouse will be
treated as the Participant's spouse to the extent provided in a qualified
domestic relations order (as defined in section 414(p) of the Code).
1.54 Spousal Consent. A written consent, on the Appropriate Form, by a
Participant's Spouse to an election, Beneficiary designation or similar action
by the Participant which meets the requirements of section 417(a)(2) of the
Code. If the Committee is satisfied that such Spousal Consent cannot be
obtained because the Spouse cannot be located, or because of other
circumstances which may be permitted under applicable law, Spousal Consent
shall be deemed to have been given. Any consent or deemed consent with respect
to a Spouse shall be effective only with respect to such Spouse. A consent that
permits designations by the Participant without any requirement of further
consent by such Spouse must acknowledge that the Spouse has the right to limit
consent to a specific beneficiary, and a specific form of benefit where
applicable, and that the Spouse voluntarily elects to relinquish either or both
of such rights. A
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revocation of a prior waiver may be made by a Participant without the consent
of the Spouse at any time before the commencement of benefits.
1.55 Supplemental Investment Fund. The Investment Fund or Funds
described in Section 4.5.2.
1.56 Taxable Year. A taxable year of an Employer (or its predecessor)
applicable for Federal income tax purposes.
1.57 Termination of Employment. An Employee's ceasing to be employed
by an Employer or Affiliate for any reason (including, without limitation,
death, disability, quit, discharge, layoff, retirement, resignation or entrance
into military service); provided, however, that:
1.57.1 If an Employee is transferred to employment with another
Employer or Affiliate or a series of Employers or Affiliates, he
shall not be deemed to have terminated employment for purposes of the
Plan until such time as he is employed neither by any Employer nor by
any Affiliate.
1.57.2 If an Employee leaves employment with an Employer or
Affiliate to enter into military service with the Armed Forces of the
United States, he shall not be deemed to have terminated employment
if (a) the Employee has reemployment rights under applicable law
throughout the entire period of such service, (b) upon discharge from
such service he retains such reemployment rights (determined after
taking into account the terms of such discharge), and (c) he returns
to the employ of an Employer or Affiliate within ninety (90) days
after the date of his completion of such service (or within such
longer period during which his reemployment rights are protected by
law). If the
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requirements of this Section 1.57.2 are not met he shall be deemed to
have terminated employment as of his last day of employment prior to
the date of entry into such service.
References in the Plan to an individual's Termination of Employment,
termination or being terminated shall have the meaning ascribed to Termination
of Employment as provided in this Section 1.57.2. For purposes of applying the
provisions of Section 9.2.4, a Participant shall not be deemed to have
terminated employment unless he has incurred a "separation from service" within
the meaning of section 401(k) of the Code.
1.58 Trust Agreement. The trust agreement or agreements referred to in
Article 12.
1.59 Trust Fund. All of the assets at any time held under the Plan by
the Trustee as provided for in Article 12.
1.60 Trustee. The corporation or corporations, individual,
individuals, or combination thereof which may at any time be acting as trustee
or trustees under the Trust Agreement.
1.61 Unmatched Contributions. With respect to any monthly Pre-Tax
Contributions made by an Employer for the benefit of a Participant and/or
Post-Tax Contributions made by a Participant, which when aggregated are in
excess of six percent (6%) of the Participants' Compensation for such month.
1.62 Valuation Date. The last day of a calendar month, or any other
date or dates so designated by the Administrative Committee in a uniform and
nondiscriminatory manner. Elective July 1, 1993, the plan administration was
simplified and enhanced by allowing investment in Investment Funds comprised of
publicly traded mutual funds that allow for daily valuations and withdrawals.
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1.63 Value. Except as otherwise expressly set forth in the Plan, as of
any date, the value of a Participant's interest in any Investment Fund shall be
determined on a reasonable and consistent basis by the Administrative Committee
or its agent designated for the determination of the value of such interest.
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ARTICLE 2
Participation
2.1 Participation Rules Effective April 25, 1997.
2.1.1 Continuing Participation. An individual who was a
Participant in the Plan on April 24, 1997 shall continue as a
Participant in the Plan if he still has an undistributed Account as
of such date. In addition, any individual whose employment with
Xxxxxxxx Xxxxxxxxxx and Cosmetics, Inc. who was transferred to the
Employer effective April 25, 1997 and who was either a Participant or
eligible to participate in the Revlon Savings, Investment and Profit
Sharing Plan on April 24, 1997 shall be eligible to participate in
the Plan as of April 25, 1997.
2.1.2 Participation Based on Eligible Employment After April 24,
1997. An Employee who was not a Participant in the Plan on April 24,
1997 may elect to become a Participant on any Entry Date on which he
meets both of the following requirements: (i) he has completed at
least one Year of Service, and (ii) he is an Eligible Employee. For
these purposes, an Eligible Employee shall be deemed to have
completed a Year of Service if he is credited with 1,000 Hours of
Service during the twelve month period starting on his Employment
Date or during any Plan Year which begins after his Employment Date.
2.1.3 Determination of Hours of Service. Hours of Service shall
be determined in accordance with Section 1.21; provided, however,
that in determining the Hours of Service to be credited to an
Employee an Employer may either actually count the
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Hours of Service to be credited to each of its Employees or such
Employer may apply the following equivalency method:
2.1.3.1 Salaried Employees. Any salaried Employee who would
be required to be credited with at least one Hour of Service in
any month shall be credited with one-hundred ninety (190) hours
for such month.
2.1.3.2 Hourly Paid Employees. In the case of hourly paid
Employees the Employer shall determine the number of Hours of
Service by dividing the Employee's total earnings for the
applicable 12-month computation period by his lowest hourly rate
of pay during the relevant computation period, provided,
however, that for any such Employee for whom the method
specified in this subsection 2.1.3.2 is applied eight hundred
seventy (870) Hours of Service shall be deemed to be the
equivalent of one thousand (1,000) Hours of Service.
2.2 Re-Employment. If a Participant or other Employee who has
terminated employment shall be rehired as an Eligible Employee, he shall be
eligible to commence or resume participation under the Plan on the later of (a)
the date of rehire or (b) the first Entry Date on which he could have become a
Participant if his prior employment by the Employer or Affiliate had been in a
position eligible for participation in the Plan.
2.3 Transfer to Eligible Employment. If an Employee transfers to
employment as an Eligible Employee from employment with an Affiliate or from
employment with an Employer other than as an Eligible Employee, he shall become
a Participant on the later of (a) the date of transfer or (b) the first Entry
Date on which he could have become a Participant if his prior
17
employment by the Employer or Affiliate had been in a position eligible for
participation in the Plan.
2.4 Completion of Participation Agreement. Except as otherwise
provided herein, in order to receive the benefit of Pre-Tax Contributions or to
make Post-Tax Contributions a Participant must complete and return the
Participation Agreement to the Administrative Committee not later than the
fifteenth (15th) day of the month prior to such date (or within such other
period as the Administrative Committee may prescribe). If a rehired Eligible
Employee, or an Eligible Employee transferred from ineligible employment,
commences or resumes participation on his date of rehire (or date of transfer
to employment as an Eligible Employee) pursuant to clause (a) of Section 2.2
(or of Section 2.3), he shall become eligible to share in or make contributions
under Article 3 effective as of the first day of the first month following his
rehire or transfer, upon execution and filing of an appropriate Participation
Agreement at least fifteen (15) days prior to such "first day" (or within such
other period as the Administrative Committee may prescribe). If a Participant
fails to complete and return a Participation Agreement within the required time
set forth above, he may begin to share in or make contributions under Section
3.1 of Article 3 as of any subsequent Entry Date as of which he is an Eligible
Employee, by completing and returning such a Participation Agreement to the
Administrative Committee not later than the fifteenth (15th) day of the month
prior to such Entry Date (or within such other period as the Administrative
Committee may prescribe).
2.5 Suspension on Transfer to Ineligible Employment. If a Participant
ceases to be an Eligible Employee but continues in the employ of an Employer or
Affiliate, his Participation Agreement shall be suspended. No Basic or Company
Contributions (if any) shall be made for a
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Participant with respect to the period of such suspension. If and when the
suspended Participant again becomes an Eligible Employee, he may execute a new
Participation Agreement, to be effective as provided in Section 2.4.
2.6 Transfers Between Employers. If a Participant transfers from
employment as an Eligible Employee with one Employer to employment as an
Eligible Employee with another Employer, his Participation Agreement shall be
deemed to apply to his second Employer in the same manner as it applied to the
prior Employer.
2.7 Right of Discharge Reserved. The establishment of the Plan shall
not be construed to confer upon a Participant any legal right to be retained in
the employ of any Employer or Affiliate, or to give any Employee, Spouse,
Beneficiary or estate of any Employee, or any other person any right to any
share of the Trust Fund or payment whatsoever, except to the extent of the
benefits provided for hereunder. All Employees shall remain subject to
discharge to the same extent as if the Plan had never been adopted and may be
treated without regard to the effect such treatment might have upon them under
the Plan. Nothing in the Plan shall be deemed to be an agreement,
consideration, inducement or condition of employment.
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ARTICLE 3
Basic and Matching Contributions
Basic Contributions and Matching Contributions shall be made in
accordance with the following provisions of this Article 3:
3.1 Pre-Tax Contributions. In order to share in contributions under
this Section 3.1, a Participant must complete the Participation Agreement
referred to in Section 1.27 and elect to reduce the cash Compensation otherwise
payable to him in any month by a specified dollar amount (not to exceed 16% of
Compensation) or by any whole or fractional percentage not to exceed 16%,
whichever he shall specify in such Participation Agreement; provided, however,
that for any Plan Year the Administrative Committee may, for any subsequent
Plan Year, establish a maximum percentage of 16% or some lesser percentage, but
not less than 6%; and provided, further, that the Administrative Committee may
allow all Participants, or one or more selected groups of Participants, to
elect to reduce the cash Compensation otherwise payable to each of them by a
specified dollar amount rather than a specified percentage of Compensation. No
Participant shall be permitted to make Pre-Tax contributions in any taxable
year in excess of limitations provided under section 402(g) of the Code, as
adjusted under section 415(d) of the Code. The Participant's Employer shall
contribute to the Plan, during or as soon as reasonably practicable after the
close of each month, an amount equal to the elected reduction in the
Participant's cash Compensation for that month as Pre-Tax Contributions to the
Employee 401(k) Account of his Basic Account.
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3.2 Post-Tax Contributions. In lieu of or in addition to any reduction
in cash Compensation agreed to in accordance with the provisions of Section
3.1, a Participant may elect in his Participation Agreement to contribute 1%,
2%, 3%, 4%, 5% or 6% of his Compensation for any month to the Plan; provided,
however, for any Plan Year the Administrative Committee may establish a maximum
percentage of up to 16% or some lesser percentage but not less than 6%; and
provided, further, that the Administrative Committee may allow all
Participants, or one or more selected groups of Participants, to elect to
reduce the cash Compensation otherwise payable to each of them by a specified
dollar amount rather than a specified percentage of Compensation.
3.3 Limit on Aggregate Pre-Tax And Post-Tax Contributions. In no case
shall the total amount of Pre-Tax Contributions made pursuant to Section 3.1
and Post-Tax Contributions made pursuant to Section 3.2 exceed an amount, to be
determined by the Administrative Committee but not more than 16% of the
Participant's Compensation for that month.
3.4 Voluntary Suspension. A Participant may voluntarily suspend either
his Pre-Tax Contributions, Post-Tax Contributions or both, effective as of the
first day of the next scheduled payroll period for such Participant, by filing
the Appropriate Form with the Administrative Committee at least fifteen (15)
days prior to the first day of that month (or within such other period as the
Administrative Committee may prescribe). No Basic or Matching Contributions
will be made for or by a Participant with respect to any period for which his
Participation Agreement has been so suspended. An Eligible Employee may
reinstate his Participation Agreement as of any Entry Date after the month in
which his suspension of such agreement became effective, by filing the
Appropriate Form with the Administrative Committee at least fifteen (15) days
before such Entry Date (or within such other period as the Committee may
prescribe).
21
3.5 Change in Contribution Rate. A Participant who has a Participation
Agreement in effect may increase or decrease the amount of his Pre-Tax and/or
Post-Tax Contributions within the limits specified in Sections 3.1, 3.2 and
3.3, effective as of any Entry Date by filing the Appropriate Form with the
Administrative Committee not later than the fifteenth (l5th) day of the month
prior to such Entry Date (or within such other period as the Administrative
Committee may prescribe).
3.6 Matching Contributions -- Amount. Each Participant's Employer may
make a contribution to the Plan for each calendar month, on behalf of each
Participant who has a Participation Agreement in effect for such month, in cash
or Company Stock. The amount shall be as determined by the Company, less an
allocable portion of any amount forfeited pursuant to Section 5.4 then to be
applied to reduce the Employer's contributions. If the contribution is in
shares of Company Stock the amount shall have a fair market value as determined
by the Company (determined as of the last day of such month). Shares of Company
Stock contributed to the Plan may be treasury shares, authorized but unissued
shares, or any combination of the foregoing. The Company is authorized to
contribute shares of Company Stock to the Plan on behalf of any other Employer,
and to the extent that the Company makes any such contribution, such Employer
shall reimburse the Company for the value thereof.
3.7 Matching Contributions -- Payment. The contributions required for
any month under Section 5.3 shall be paid to the Trustee after the first day of
such month, but in no case later than as soon as reasonably practicable after
the close of such month.
3.8 Limit on Contributions. Notwithstanding any other provision in
this Plan to the contrary, all contributions for any Plan Year on behalf of a
Participant who is a Highly
22
Compensated Employee shall be reduced if and to the extent necessary in order
that the requirements of Article 17 and Sections 20.2 and 20.6 are met.
3.9 Determination by Administrative Committee. If the Administrative
Committee shall conclude that a reduction in the Pre-Tax Contributions made for
any Participant is or may be necessary or advisable in order to comply with the
limitations of Section 3.8 for any Plan Year, the maximum percentage allowable
for Pre-Tax Contributions under Section 3.1 shall be reduced in accordance with
the direction of the Administrative Committee, and the Committee may, in its
sole discretion, take the following action:
3.9.1 The Committee may direct that the Participation Agreement
of each Participant affected by such determination be modified
accordingly, with respect to Pre-Tax Contributions not yet paid into
the Plan, so as to (i) reduce the elected percentage (or dollar
amount, if applicable) of payroll reduction and (ii) to
recharacterize the Participant's election in accordance with Section
3.1.
3.9.2 The Committee shall notify each affected Participant and
his Employer of any such reduction or recharacterization. Any such
reduction or recharacterization may apply either to all Participants,
to a relevant group of Participants or to individual Participants
determined by the Committee, whichever the Administrative Committee
shall determine in its sole discretion. If amounts are not paid into
the Plan as Pre-Tax Contributions or Post-Tax Contributions in
accordance with any determination pursuant to this Section 3.9, such
amounts shall instead be distributed to the affected Participant in
accordance with Article 20.
23
3.10 Contributions May Not Exceed Amount Deductible. In no event shall
Employer Contributions under this Article 3 for any taxable year of an Employer
exceed the maximum amount (including amounts carried forward) deductible for
that taxable year under section 404(a)(3) of the Code. In the case of an
Employer that is a joint venture between two or more corporations or other
entities, the limitation under this Section 3.10 shall be determined by
reference to the applicable deductible limit of each corporation or other
entity which is entitled to deduct its distributable share of such
contributions for Federal income tax purposes.
3.11 Contributions Conditioned on Deductibility. Notwithstanding any
other provision of the Plan, each contribution by an Employer under this
Article 3 is conditioned on the deductibility of such contribution under
section 404 of the Code, and on the initial qualification of the Plan under
section 401(a) of the Code.
3.12 Adjustment of Contributions Based on Limit on Annual Additions.
Notwithstanding any of the foregoing provisions to the contrary, a Participant
may, at such time and in such manner as the Administrative Committee may
prescribe, suspend or change the amount of reduction in his cash Compensation
or the amount of his Post-Tax Contributions provided for under any applicable
Participation Agreement in order to avoid an allocation of contributions to his
Account which would violate the limitations of Article 17.
24
ARTICLE 4
Accounts and Designation of Investment Funds
4.1 Basic Account. A Basic Account shall be maintained for each
Participant in which shall be entered to separate subaccounts: (a) the amount
of Pre-Tax Contributions made by his Employer as a result of his election to
reduce his cash Compensation as described in Section 3.1 and (b) the amount of
Post-Tax Contributions made by the Participant in accordance with the
provisions of Section 3.2.
4.2 Pre-IPO Matching Contributions Account. A Pre-IPO Matching
Contributions Account shall be maintained for each Participant in which shall
be entered the amount of Pre-IPO Matching Contributions made for his benefit
under Section 3 .6.
4.3 Post-IPO Matching Contributions Account. A Post-IPO Matching
Contributions Account shall be maintained for each Participant in which shall
be entered the amount of Post-IPO Matching Contributions made for his benefit
under Section 3.6.
4.4 Company Stock Matching Contributions Account. A Company Stock
Matching Contributions Account shall be maintained for each Participant in
which shall be entered the amount of Company Matching Contributions made for
his benefit under Section 3.6.
4.5 Investment Funds. The Investment Committee shall direct that the
Trust Fund be subdivided into three or more Investment Funds which shall be
separately invested, which shall include but need not be limited to the
following:
4.5.1 Savings Fund. A Savings Fund which shall be invested and
reinvested in interest-bearing and/or similar securities, which may
include bonds, short and
25
medium term notes, or other obligations, certificates of deposit,
commercial paper, or part interests therein, obligations issued or
guaranteed as to interest and principal by the United States
Government or any instrumentality or agency thereof, a guaranteed
investment contract or contracts between the Trustee and an insurance
company or companies containing such terms and conditions with
respect to payment of principal and interest as shall be agreed upon
by the parties to such contract or contracts, and/or any common,
collective or commingled trust fund which is invested virtually
exclusively in property of the kind specified in this Section 4.5.1.
In the discretion of the Investment Committee, the Savings Fund shall
be subdivided into such two or more sub-funds as the Investment
Committee shall specify, each to be separately invested in property
of the kind described in this Section 4.5.1 having such
characteristics as the Investment Committee shall specify. Except as
the Investment Committee shall otherwise direct each such sub-fund
shall not constitute a separate Investment Fund for purposes of this
Plan.
4.5.2 Supplemental Investment Fund. One or more Supplemental
Investment Funds which shall be invested and reinvested principally
in securities or other property, real or personal, directly or
through the medium of any insurance company, separate account, any
mutual fund or family of mutual funds, or any common, collective or
commingled trust fund which is invested principally in property of
any kind. In the discretion of the Investment Committee, any
Supplemental Investment Fund shall be subdivided into such two or
more sub-funds as the Investment Committee shall specify, each to be
separately invested as the Investment Committee shall specify. Except
as the
26
Investment Committee shall otherwise direct each such sub-fund shall
constitute a separate Investment Fund for purposes of this Plan.
4.5.3 Revlon Stock Fund. A Revlon Stock Fund invested solely in
Revlon Stock as more fully described in the Trust Agreement, except
that to the extent necessary to effect distributions (or to meet
other administrative requirements of the Plan), amounts held in the
Revlon Stock Fund may be held in cash or such other short term
investments as the Investment Committee deems suitable.
Notwithstanding any other provision of the Plan, the Post-IPO
Matching Contribution Account is the only Plan Account that may be
invested in the Revlon Stock Fund.
4.5.4 Company Stock Fund. A Company Stock Fund invested solely
in Company Stock as more fully described in the Trust Agreement,
except that to the extent necessary to effect distributions (or to
meet other administrative requirements of the Plan), amounts held in
the Company Stock Fund may be held in cash or such other short term
investments as the Investment Committee deems suitable.
Notwithstanding any other provision of the Plan to contrary, the
Company Stock Matching Contributions Account is the only Plan Account
that may be invested in the Company Stock Fund.
4.6 Direction as to Basic Contributions. A Participant may, by giving
notice on the Appropriate Form or as the Administrative Committee may otherwise
prescribe and within such time as the Administrative Committee may prescribe,
designate the proportion of the future Basic Contributions made for his behalf
for periods on and after January 1, 1993, which shall be allocated to and
invested in any Investment Fund (other than the Revlon Stock Fund); provided,
however, that the percentage of such contributions to be invested in any such
Fund shall be either
27
10%, 15%, 20%, 25%, 30%, 35%, 40%, 45%, 50%, 55%, 60%, 65%, 70%, 75%, 80%, 85%,
90%, 95% or 100% thereof; provided, further, however, that from and after July
1, 1993, such percentage shall be any whole percentage as approved by the
Administrative Committee and designated by the Participant. Such designation
shall apply equally to his Matched Contributions and Unmatched Contributions,
if any. Any election under this Section 4.6 shall continue in effect until
changed by a new designation. A Participant may change his election as of any
Entry Date, by filing a new designation on the Appropriate Form with the
Administrative Committee or as the Administrative Committee may otherwise
prescribe not later than the fifteenth (15th) day of the month prior to such
date or within such other period as the Administrative Committee may prescribe.
The Administrative Committee may refuse to accept any Participation Agreement
that is deficient in respect of any election as to the designation of the
investment of Basic Contributions; or, the Administrative Committee may accept
such deficient form provided, however, that in such case all of the
Participant's Basic Contributions shall be deemed to have been designated by
the Participant for investment in the Savings Fund.
4.7 Matching Contributions.
4.7.1 General Rule. All Pre-IPO Matching Contributions shall be
invested in the same Investment Funds (and in the same proportions)
which the Participant has designated under Section 4.6 with respect
to his Basic Contributions, together with all dividends and other
distributions resulting from such investments. All Post-IPO Matching
Contributions shall be invested in the Revlon Stock Fund, without
regard to the investment direction of the Participant, together with
all dividends and other distributions resulting from such
investments. Company Matching Contributions may be invested in
28
cash or in shares of Company Stock, without regard to the investment
direction of the Participant . If such Company Matching Contributions
are invested in Company Stock, they shall include all dividends and
other distributions resulting from such investments.
4.7.2 Special Rule for Post-IPO Matching Contributions and
Company Matching Contributions. If the Investment Committee
determines that legal or contractual restrictions and/or blockage
and/or other market considerations would make the Plan's purchase or
sale of Company Stock or the sale of Revlon Stock from or to the
public markets illegal, impracticable or inadvisable, the Investment
Committee shall direct the Trustee to suspend all future purchase or
sale of Company Stock in the Company Stock Matching Contributions
Account or sales of Revlon Stock in the Revlon Stock Fund until
further notice.
4.7.3 Redesignation of Amounts in Revlon Stock Fund. A
Participant who has attained age 65 or has attained age 55 and has 10
years of Service may, by giving notice on the Appropriate Form to the
Administrative Committee, or as the Administrative Committee may
otherwise prescribe, direct the Trustee to transfer all or a portion
of his interest in the Revlon Stock Fund to any other Investment Fund
and to have the amount transferred invested, in the future, only in
Investment Funds other than the Revlon Stock Fund or the Company
Matching Contributions Account.. A Participant shall be permitted to
make only two elections under this Section 4.7.3, each of which shall
be irrevocable.
4.7.4 Redesignation of Amounts in Company Matching Contributions
Account. A Participant who has attained age 65 or has attained age 55
with 5 years of Service may, by giving notice on the Appropriate Form
to the Administrative Committee,
29
or as the Administrative Committee may otherwise prescribe, direct
the Trustee to transfer all or a portion of his interest in the
Company Stock Matching Contributions Account to any other Investment
Fund and to have the amount transferred invested, in the future, only
in Investment Funds other than the Revlon Stock Fund or the Company
Stock Matching Contributions Fund. A Participant shall only make two
elections under this Section 4.7.4, each of which shall be
irrevocable.
4.8 Reallocation Permitted. A Participant may elect to reallocate the
investment of his Accounts (other than his Post-IPO Matching Contributions
Account) among the Investment Funds (other than the Revlon Stock Fund);
provided, however, that reallocation among the Investment Funds shall only be
made in increments of 5% of the value of the Participant's aggregate Accounts,
or any other increments that the Administrative Committee in its sole
discretion shall prescribe. Each Participant may reallocate his Accounts as of
the end of any month, or on a more frequent basis as the Administrative
Committee shall prescribe, based on the balance of such Participant's Accounts
as of the end of such month (or such other date), as determined after giving
effect to all other adjustments made to such Account as of that date. Any such
reallocation shall be effected in such manner permitted by the Administrative
Committee not later than the fifteenth (15th) day of such month (or within such
other period as the Administrative Committee shall prescribe). Each Participant
shall be permitted to make such changes as frequently as the Administrative
Committee in its sole discretion shall prescribe, and shall be permitted to
make at least one such change in any three-month period.
4.9 Account Adjustments.
30
4.9.1 Subject to the provisions of Section 4.9.2, as of each
Valuation Date the Administrative Committee shall adjust
appropriately each Participant's Accounts to reflect, with respect to
each Investment Fund in which each such Account is invested, (i) his
proportionate share (based on the prior value of his Account in the
applicable Investment Fund) of income, expenses (if any) payable from
the Trust Fund, and any increase or decrease in the fair market value
of Trust Fund assets since the preceding Valuation Date, (ii) any
contributions made on his behalf, including for this purpose
contributions made after such Valuation Date but credited as of such
Valuation Date, (iii) forfeiture allocations in lieu of Company
Contributions, (iv) withdrawals, (v) distributions and (vi) transfers
between Investment Funds. For this purpose:
4.9.1.1 Allocation of Basic Contributions. Basic
Contributions for the benefit of a Participant made during any
month shall be credited to his Basic Account as of the day
immediately following the date on which such contribution was
made.
4.9.1.2 Allocation of Matching Contributions. Matching
Contributions, if any, (and forfeitures in lieu thereof) made on
behalf of a Participant made during any month shall be credited
to his Company Account pursuant to Sections 4.2, 4.3 and 4.4
hereof, as of the day immediately following the date on which
such contribution was made.
4.9.1.3 Adjustment for Withdrawals. Withdrawals from a
Participant's Accounts shall be charged against his Basic and
Matching
31
Contributions and Rollover Accounts as of the date on which such
withdrawal is effective pursuant to Article 7 or 8.
4.9.2 Notwithstanding any other provision of the Plan, to the
extent that Participants' Accounts are invested in mutual funds or
other assets for which daily pricing is available ("Daily Pricing
Media"), all amounts contributed to the Trust Fund will be invested
at the time of their actual receipt by the Daily Pricing Media, and
the balance of each Account shall reflect the results of such daily
pricing from the time of actual receipt until the time of
distribution. Participant investment elections and changes made
pursuant to the Plan shall be effective upon receipt by the Daily
Pricing Media, and Basic Contributions and Matching Contributions
(and forfeitures in lieu thereof) made on behalf of a Participant to
the extent invested in Daily Pricing Media shall be credited to such
Participant's Basic Contributions or Matching Contributions Account,
as appropriate, on the business day such contributions are so
invested. References elsewhere in the Plan to the investment of
contributions "as off' a date other than that described in this
Section 4.9.2 shall apply only to the extent, if any, that assets of
the Trust Fund are not invested in Daily Pricing Media.
4.10 Unit Accounting for the Revlon Stock Fund and the Company Stock
Matching Contributions Account. The Committee may, for administrative purposes,
establish unit values for the Revlon Stock Fund and the Company Stock Fund (or
any portion thereof) and maintain the accounts setting forth each Participant's
interest in Revlon Stock or Company Stock (or portion thereof), in terms of
such units, all in accordance with such rules and procedures as such Committee
shall deem to be fair, equitable and administratively practicable. In the event
that unit
32
accounting is thus established for the Revlon Stock Fund or the Company Stock
Fund (or portion thereof), the value of a Participant's interest in the Revlon
Stock Fund or Company Stock Fund (or portion thereof) at any time shall be an
amount equal to the then value of a unit in such Revlon Stock Fund or Company
Stock Fund (or portion thereof) multiplied by the number of units then credited
to the Participant.
4.11 Correction of Error. The Administrative Committee may adjust the
Accounts of any or all Participants and Beneficiaries in order to correct
errors or rectify omissions, in such manner as such Committee believes will
best result in the efficient administration of the Plan on an equitable and
nondiscriminatory basis.
4.12 Allocation Shall Not Vest Title. The fact that allocation is made
and amounts are credited to an Account of a Participant shall not vest in such
Participant any right, title or interest in or to any assets except at the time
or times and upon the terms and conditions expressly set forth in this Plan,
nor shall the Trustee be required to segregate physically the assets of the
Trust Fund by reason thereof.
4.13 Statement of Accounts. At least twice within each calendar year,
the Administrative Committee shall distribute to each Participant a statement
showing the balance in each of his Accounts. Such statement may be distributed,
in the discretion of the Administrative Committee, in connection with or as a
part of a general statement of employee benefits given to Employees on a
regular or periodic basis.
33
ARTICLE 5
Vesting
5.1 Vesting.
5.1.1 Company Contributions and Company Match. A Participant's
entire Company Contributions Account and Company Match Contributions
Account shall be fully vested on the earliest of (a) Early Retirement
Age, (b) Normal Retirement Age, (c) Termination of Employment on
account of Disability, or (d) death. Prior to the occurrence of any
of the foregoing events, a Participant shall be vested in his Company
Contribution Account as follows
In the case of a Participant who has five (5) or more
consecutive 1 year Breaks in Service all Service after such
Breaks in Service will be disregarded for the purpose of vesting
the Company Contributions Account balance that accrued before
such Breaks in Service. Such Participant's pre-Break Service
will count in vesting his post-Break Matching Contributions
Account balance only if either:
(i) such Participant has any nonforfeitable interest in
such account balance at the time of Termination of Employment;
or
(ii) upon returning to Service the number of consecutive
1-year Breaks in Service is less than the number of years of
Service. A Participant's interest in his Basic Account, Matching
and Rollover Account shall at all times be fully vested, and
shall not be subject to forfeiture pursuant to any provision of
this Plan.
34
5.2 Forfeiture of Non-Vested Account Balances upon Termination of
Employment. If, upon Termination of Employment, a Participant's vested Account
balance is less than or equal to $3,500 (or such other amount prescribed by
applicable law), the Participant shall receive a distribution of the vested
portion of such Accounts as set forth in Article 9, and the non-vested portion
will be treated as a forfeiture. If on Termination of Employment the balance of
the Participant's vested Accounts is greater than $3,500 (or such other amount
prescribed by applicable law), and the Participant elects to receive the
balance of his vested Accounts, the non-vested portion will be treated as a
forfeiture under Section 5.4. For purposes of this Section 5.2 if the value of
a Participant's vested Account balance is zero, the Participant shall be deemed
to have received a distribution of such vested account balance upon Termination
of Employment.
5.3 Reinstatement of Forfeited Balances. If subsequent to the
Termination of Employment of a Participant such Participant is rehired by an
Employer or any Affiliate prior to the end of the Plan Year in which his
employment was terminated or prior to the time when such Participant's
pre-Break Service would be disregarded for vesting purposes under Section 5.2,
any non-vested balance in such Participant's Matching Contributions Account
shall be restored to him, as follows:
5.3.1 If not previously forfeited, such nonvested balance shall
not be forfeited, except as may be otherwise provided for in the
event of his subsequent Termination of Employment or pursuant to
Section 9.3 hereof.
5.3.2 If previously forfeited, such balance shall be restored
out of contributions for the month of rehire made by the Employer
formerly employing such
35
Participant, and such Employer shall make Matching Contributions for
such month in amounts sufficient to effect such restoration.
5.4 Application of Forfeitures. All forfeitures shall be applied first
to reduce future Company Contributions, if any, and if there are no such
contributions, then as if such Company Contributions had been made, allocated
in the ratio which a Participant's Compensation bears to the total Compensation
of all Participants (calculated to the nearest dollar).
36
ARTICLE 6
Normal Withdrawals During Employment
6.1 Withdrawal Options. No more frequently than the Administrative
Committee may allow, and subject to such procedures as the Administrative
Committee may prescribe, a Participant who is an Employee may elect, with the
approval of the Administrative Committee, by filing the Appropriate Form as
directed by the Administrative Committee, to withdraw (a) all or any portion of
his Post-Tax Contribution Account, (b) if the maximum withdrawal permitted
under clause (a) has been made, all or any portion of his vested Post-IPO
Matching Contributions Account, (c) if the maximum withdrawal under clause (b)
has been made, all or any portion of his Company Stock Matching Contributions
Account and (d) if the maximum withdrawal under clause (c) has been made, all
or any portion of his Rollover Account.
6.2 Values. The amount withdrawn pursuant to Section 6.1 shall be
based on the Value of the Participant's Accounts as of the Valuation Date on
which the Appropriate Form filed by the Participant was received by the
Administrative Committee or its designee for a withdrawal effective prior to
July 1, 1993, and shall be based on the Value of the Participant's Accounts as
of the withdrawal date for a withdrawal effective on or after July 1, 1993.
6.3 No Replacement of Withdrawn Amounts. A Participant may not replace
any amounts withdrawn hereunder.
6.4 Payment of Withdrawals. Any amounts withdrawn pursuant to this
Article 6 shall be paid or distributed as soon as administratively practicable
after the Valuation Date as of
37
which the withdrawal election is effective. Except as the Administrative
Committee shall otherwise direct, all withdrawals shall be paid in cash.
6.5 Accounts to Which Withdrawals to be Charged. Any withdrawals under
this Article 6 shall be charged first to a Participant's Post-Tax Contributions
Account and then, after such Account has been exhausted, to his Pre-IPO
Matching Contributions Account, then, after such Account has been exhausted, to
his Post-IPO Matching Contributions Account, then after such Account has been
exhausted, to his Company Match Account, then, after such Account has been
exhausted, to his Old Profit Share Account, then, after such Account has been
exhausted, to his New Profit Share Account, then, after such Account has been
exhausted, to his Company Stock Matching Contributions Account and finally, to
his Rollover Account. No withdrawals may be made under this Article from a
Participant's Employee 401(k) Account.
6.6 Values and Allocation Among Investment Funds. All withdrawals
pursuant to this Article 6 shall be based upon the value of the relevant
Account(s) on the Valuation Date as of which the withdrawal is effective. If
the Participant's Basic Account, Pre-IPO Matching Contributions Account,
Company Match Account, Old Profit Share Account and New Profit Share Account
are invested in more than one Investment Fund, such withdrawal shall be
allocated pro rata among such Funds unless the Administrative Committee shall
otherwise direct. Any amounts withdrawn pursuant to this Article 6 shall be
paid to a Participant in cash as soon as administratively practicable after the
Valuation Date as of which such withdrawal is effective.
6.7 Participant Loans. The Administrative Committee may instruct the
Trustee to make one or more loans to a Participant from the Trust Fund, in
accordance with the terms and
38
conditions of a participant loan program established by such Committee for the
Plan and as may be modified by such Committee from time to time.
39
ARTICLE 7
Withdrawals for Hardship
7.1 Definition of Hardship. Upon the occurrence of hardship a
Participant who is an Employee may withdraw, effective as of such Valuation
Date as the Administrative Committee shall designate, amounts from his Post-Tax
Contributions Account, the vested portion of his Pre-IPO Matching Contributions
Account, Post-IPO Matching Contributions Account, Company Match Account, Old
Profit Share Account, New Profit Share Account, the vested portion of his
Company Stock Matching Contributions Account, his Rollover Account and his
Employee 401(k) Account. For purposes of this Article 7, the term "hardship"
shall mean immediate and substantial financial need arising out of any one or
more of the following:
7.1.1 Expenses or debts incurred or assumed by a Participant,
and not covered by insurance, arising out of an accident to or the
death, illness, disability, or other medical or dental needs of a
Participant, his dependent, or a member of his family;
7.1.2 Sudden and unexpected losses, not covered by insurance,
through casualty, theft or a judgment against Participant or a
dependent;
7.1.3 Expenses of education of a Participant, his dependent, or
of a member of his family;
7.1.4 Severe curtailment of income of a Participant due to
reasons beyond his control;
7.1.5 Substantial expenditures required in connection with a
Participant's primary residence; or
40
7.1.6 Any other emergency condition in the financial affairs of
a Participant. Distribution pursuant to this Section 7.1 shall be
made from and charged to, first, his Post-Tax Contributions Account,
second, his Rollover Account, third, his Pre-IPO Matching
Contributions Account, fourth, his Post-IPO Matching Contributions
Account, fifth, his Company Match Account, sixth, his Old Profit
Share Account, seventh, his New Profit Share Account eighth, his
Company Stock Matching Contributions Account and, last, his Employee
401(k) Account, except as the Administrative Committee shall
otherwise direct. The withdrawal request shall be made on the
Appropriate Form within such time as the Administrative Committee may
prescribe.
7.2 Distribution Deemed Necessary to Satisfy Financial Need. A
distribution pursuant to this Article 7 shall be deemed necessary to satisfy an
immediate and heavy financial need of an Employee if both of the following
requirements are satisfied:
7.2.1 The distribution is not in excess of the amount of the
immediate and heavy financial need of the Employee (after taking into
account the Employee's other reasonably available resources, based on
such representations or other information as the Administrative
Committee may, in its discretion, request); and
7.2.2 The Employee has obtained all distributions, and all
nontaxable loans currently available under all employee benefit plans
maintained by the Employer, including under this Plan in accordance
with Section 6.7 and the participant loan program thereunder.
7.3 Values and Allocation Among Investment Funds. All
withdrawals pursuant to this Article 7 shall be based upon the value
of the relevant Account(s) on the Valuation Date as
41
of which the Administrative Committee directs the withdrawal to be
effective. If the Participant's Basic Account is invested in more
than one Investment Fund, such withdrawal shall be allocated pro rata
among such Funds unless the Administrative Committee shall otherwise
direct. Any amounts withdrawn pursuant to this Article 7 shall be
paid to a Participant in cash (except as the Administrative Committee
shall otherwise direct), as soon as administratively practicable
after the Valuation Date as of which such withdrawal is effective.
7.4 Post-1988 Earnings on Pre-Tax Contributions. Notwithstanding
anything to the contrary in this Article 7, post-1988 earnings on Pre-Tax
Contributions may not be withdrawn on account of financial hardship.
42
ARTICLE 8
Distributions on Termination of Employment
8.1 Distribution on Termination of Employment. Upon a Participant's
Termination of Employment, the entire balance of his vested Accounts shall be
distributed to him or, if he dies prior to distribution, to his Beneficiary.
Such distribution shall be made in accordance with the provisions of Article 9.
Any portion of a Participant's Accounts in which he does not have a vested
interest, in accordance with Section 5.1, at the time of Termination of
Employment shall be forfeited as provided in Section 5.2 and shall be applied
to reduce future Company Contributions, if any.
8.2 Valuation. The balance of a Participant's vested Accounts for
purposes of Section 8.1 shall be determined as of the distribution date for a
distribution made on or after July 1, 1993.
8.3 Delay of Distributions or Withdrawals.
(a) Notwithstanding any other provision of this Plan, the
Administrative Committee may, in its discretion, defer the
making of all or any part of a distribution or withdrawal to
which any person may otherwise be entitled under this Plan until
receipt of a favorable determination letter with respect to the
qualification of the Plan under sections 401(a) of the Code.
(b) Notwithstanding the provisions of Section 8.1, the
Administrative Committee shall not be required to make the
distributions otherwise required under this Article 8 until
after filing of the Appropriate Form by the Participant or his
Beneficiary) with the
43
Administrative Committee; provided, that the Administration Committee
may, in its sole discretion, waive such filing requirement and
proceed to make distribution accordingly.
8.4 30-Notice Requirement: Waiver.
8.4.1 30-Day Notice Requirement. Subject to Section 8.4.2, a
distribution under the Plan may not commence less than 30 days after
notice (if applicable) is given to the Participant (or his
Beneficiary, if applicable) pursuant to Section 1.41 l(a)-1 l(c) of
the Income Tax Regulations.
8.4.2 Waiver. If a distribution is one to which sections
401(a)(11) and 417 of the Code do not apply, such distribution may
commence less than 30 days after the notice required under section
1.411(a)-ll(c) of the Income Tax Regulations is given, provided that:
(i) the Administrative Committee clearly informs the
Participant that the Participant has a right to a period of at
least 30 days after receiving the notice to consider the
decision of whether or not to elect a distribution (and, if
applicable, a particular distribution option), and
(ii) the Participant, after receiving the notice,
affirmatively elects a distribution.
44
ARTICLE 9
Payment of Benefits
9.1 In General. Subject to Section 9.5, distribution required upon
Termination of Employment for any reason shall be made promptly following
Termination of Employment by one or more payments within a single Plan Year;
provided that contributions with respect to the Plan Year in which his
employment terminates may be paid in a later year. All Accounts other than
amounts in the Post-IPO Matching Contributions Account shall be distributed in
cash based on their Value as of the distribution date pursuant to Section 8.2.
Amounts in the Post-IPO Matching Contributions Account may be distributed in
cash or stock, determined as follows: If the Participant's Post-IPO Matching
Contributions Account is credited with 100 or more shares of Revlon Stock, the
distribution from such Account shall be made in Revlon Stock. If the
Participant's Post-IPO Matching Contributions Account is credited with fewer
than 100 shares of Revlon Stock, the distribution from such Account shall be
made in cash. Distribution of partial shares of Revlon Stock shall be made in
cash.
9.2 Time of Commencement of Benefits. Notwithstanding any other
provision of the Plan, the following provisions of this Section 9.2 shall be
applicable to all benefit payments:
9.2.1 In General. All distributions under this Plan will be
effected so as to comply with section 401(a)(9) of the Code and the
regulations thereunder, which are hereby incorporated fully by
reference. The aggregate Account balance of a Participant must be
distributed or begin to be distributed no later than the
Participant's required
45
beginning date. The required beginning date for a Participant shall
be determined as follows:
(a) General Rule. A Participant who is actively employed by
the employer may elect to receive distributions by the first day
of April of the calendar year following the calendar year in
which the Participant attains age 70 1/2.
(b) Transitional Rule. The required beginning date of a
Participant who attains age 70 1/2 before January 1, 1988, shall
be determined in accordance with (i) or (ii) below:
(i) Non-5-percent Owners. The required beginning date of a
Participant who is not a "5-percent owner" (as defined in (c)
below) is the first day of April of the calendar year following
the calendar year in which the later of retirement or attainment
of age 70 1/2 occurs.
(ii) 5-percent Owners. The required beginning date of a
Participant who is a 5-percent owner during any year beginning
after December 31, 1979, is the first day of April following the
later of:
(1) the calendar year in which the Participant attains age
70 1/2, or
(2) the earlier of the calendar year with or within which
ends the Plan Year in which the Participant becomes a 5-percent
owner, or the calendar year in which the Participant retires.
The required beginning date of a Participant who is not a
5-percent owner who attains age 70 1/2 during 1988 and who has
not retired as of January 1, 1989, is April 1, 1990.
46
(c) 5-percent Owner. A Participant is treated as a
5-percent owner for purposes of this Section if such Participant
is a 5-percent owner as defined in section 416(i) of the Code
(determined in accordance with section 416 but without regard to
whether the Plan is top-heavy) at any time during the Plan Year
ending with or within the calendar year in which such owner
attains age 66 1/2' or any subsequent Plan Year.
(d) Once distributions have begun to a 5-percent owner
under this Section, they must continue to be distributed, even
if the Participant ceases to be 5-percent owner in a subsequent
year.
9.2.2 Benefit Commencement Date. Except if otherwise elected by
a Participant, the Participant's benefits will commence no later than
the 60th day after the close of the Plan Year in which the latest of
the following occurs: (a) the attainment by the Participant of Early
Retirement Age, (b) the attainment by the Participant of Normal
Retirement Age; or (c) the tenth anniversary of the year in which the
Participant commenced participation in the Plan; or (d) the
Participant's most recent Termination of Employment.
9.2.3 Retroactive Payments. If the amount of a payment required
to commence on the date determined under Section 9.2.1 or 9.2.2
cannot be ascertained by such date, or if it is not possible to make
such payment on such date because the Administrative Committee has
been unable to locate the Participant, Beneficiary or Spouse after
making reasonable efforts to do so, or if the Appropriate Form has
not been filed by the Participant, Beneficiary or Spouse with the
Administrative Committee, a payment retroactive to such date may be
made no later than sixty (60) days after the earliest date on
47
which the amount of such payment can be ascertained under the Plan or
the date on which the Participant, Beneficiary or Spouse is located
(whichever is applicable).
9.2.4 Pre-Tax Contributions. Notwithstanding any other provision
of this Plan, Pre-Tax Contributions are distributable only in the
event that one of the following events occurs: (i) the Employee's
death, Disability or Termination of Employment, (ii) the Employee's
attainment of age 59 l/2, (iii) a distribution on account of hardship
as defined in Article 7, (iv) a distribution on account of Excess
Elective Deferrals, as defined in Section 20.3, (v) termination of
the Plan without establishment of a successor plan (within the
meaning of section 401 (k)(10) of the Code and the regulations
thereunder), or (vi) one of the other events specified in section
401(k)(10) of the Code.
9.3 Inability to Locate Distributee. Notwithstanding any other
provision of the Plan, if the Administrative Committee cannot locate any person
to whom a payment is due under the Plan and no other payee has become entitled
thereto pursuant to any provision of the Plan, the benefit in respect of which
such payment is to be made shall be forfeited at such time as the Committee
shall determine in its sole discretion (but in all events prior to the time
such benefit would otherwise escheat under any applicable state law); provided,
however, that any benefit so forfeited shall be reinstated if such person
subsequently makes a valid claim for such benefit and shall be paid out of any
forfeited amounts and, if and to the extent necessary, out of other Employer
contributions made for this purpose.
9.4 Distribution to Beneficiary. Distribution to a Participant's
Beneficiary in accordance with the provisions of this Article 9 shall be made
as soon as administratively
48
practicable after the Participant's death, except as otherwise provided in the
following provisions of this Section 9.4. Notwithstanding anything in Section
9.1 to the contrary:
9.4.1 A Participant may elect to cause any distribution due to
his Beneficiary to be made over a period of two or more calendar
years (provided, that such period shall end not later than the fifth
anniversary of the Participant's death), in such manner as the
Participant shall designate in such election.
9.4.2 If no election by a Participant becomes effective under
Section 9.4.1, his Beneficiary may make such an election.
9.5 Limitation on Distribution. Notwithstanding any other provision of
this Plan, but subject to Article 14, if a Participant's employment terminates
and his vested interest under the Plan exceeds $3,500 as calculated under
section 41 l(a)(11) of the Code (or such other amount prescribed by applicable
law), such vested interest shall not be "immediately distributed" (within the
meaning of section 411(a)(11) of the Code) without his written consent, except
as otherwise permitted by law.
9.6 Benefits Deemed Offered. Notwithstanding any other provision of
this Article 9 any optional form of benefit, form of distribution or joint and
survivor annuity required to be offered in this Plan to meet the requirements
of sections 411(d)(6), 401(a)(11) or 417 of the Code is deemed offered to those
Participants to whom such requirements apply.
9.7 GCM 39824 Clarification. It is the intention of this Plan not to
make distributions to any individual whose employment with an Employer (or an
Affiliate) has terminated unless a "severance of employment" has occurred, in
accordance with GCM 39824 (Aug. 15, 1990).
49
ARTICLE 10
Beneficiary Designation
10. 1 Beneficiary.
10.1.1 Designation of Beneficiary. Notwithstanding any other
provision of this Plan, but subject to the further provisions of this
Section 10.1, each Participant may designate, at such time and in
such manner as the Administrative Committee shall prescribe, a
Beneficiary or Beneficiaries (who may be any one or more members of
his family or any other persons, executor, administrator, any trust,
foundation or other entity) to receive any benefits distributable
hereunder after the death of the Participant as provided herein. Such
designation of a Beneficiary or Beneficiaries shall not be effective
for any purpose unless and until it has been filed by the Participant
with the Administrative Committee, provided, however, that a
designation mailed by the Participant to the Committee prior to death
and received by it after his death shall take effect upon such
receipt, but prospectively only and without prejudice to any payor or
payee on account of any payments made before receipt by the
Committee.
10.1.2 Spouse as Presumptive Beneficiary. Notwithstanding
Section 10.1.1, a Participant's sole Beneficiary shall be his
surviving Spouse (if the Participant has a surviving Spouse) unless
the Participant has designated another Beneficiary with Spousal
Consent.
10.1.3 Change of Beneficiary. A Participant may, from time to
time in such manner as the Administrative Committee shall prescribe,
revoke any prior designation of
50
Beneficiary (without Spousal Consent) and make a new designation of
Beneficiary; provided that any such new designation which has the
effect of naming a person other than the Participant's surviving
Spouse as sole Beneficiary is subject to the Spousal Consent
requirement of Section 10.1.2.
10.1.4 Failure to Designate. If a Participant has failed to
designate effectively a Beneficiary to receive the Participant's
death benefits under the Plan, or if a Beneficiary previously
designated has predeceased the Participant and no alternative
designation has become effective, such benefits shall be distributed
to the Participant's surviving Spouse, if any, or if no Spouse
survives the Participant, to the Participant's estate.
10.1.5 Proof of Death. The Administrative Committee may, as a
condition precedent to making payment to any Beneficiary, require
that a death certificate, burial certificate or other evidence of
death acceptable to it be furnished.
10.1.6 Discharge of Liability. If distribution in respect of a
Participant is made under this Plan in a form, or to a person
reasonably believed by the Administrative Committee or its delegate
to be proper (taking into account any document purporting to be a
valid consent of the Participant's Spouse, or any representation by
the Participant that he is not married or any election or revocation
with respect to form of payment or designation of Beneficiary), the
Plan shall have no further liability with respect to the Participant
(or his Spouse or Beneficiary) to the extent of such distribution.
10.2 Common Disaster. If a Participant and any of his Spouse or
Beneficiary shall die in a manner such that there is no sufficient evidence (as
determined by the Administrative
51
Committee, without regard to any presumption of law otherwise applicable) that
the persons have died otherwise than through a common disaster or if a
Participant's Beneficiary (other than his Spouse) died within five days after
the Participant, it shall be presumed for all purposes of the Plan that the
Participant died last.
52
ARTICLE 11
Administration
11.1 Appointment of Committees.
11.1.1 There are hereby created an Administrative Committee and
an Investment Committee, each of which shall consist of not less than
two members to be appointed by the Board of Directors of the Company.
Each member of a Committee may resign, or may be removed at any time
by the Board of Directors of the Company (with or without cause),
and, in the event of the removal, death or resignation of any member,
his successor shall be appointed by such Board. In the event that a
vacancy or vacancies shall occur on a Committee, the remaining member
or members shall act as the Committee until the Board of Directors of
the Company fills such vacancy or vacancies. The members of each
Committee shall serve without compensation for their services as such
members.
11.1.2 No person shall be ineligible to be a member of a
Committee because he is, was or may become entitled to benefits under
the Plan or because he is a director and/or officer of an Employer or
Affiliate; provided, that no member of a Committee shall participate
in any determination by the Committee relating specifically to his
own benefits under the Plan.
11.1.3 The members of each Committee shall serve without bond
except to the extent required by applicable law.
11.2 Powers and Authority: Action Conclusive. Except as otherwise
expressly provided in the Plan or in the Trust Agreement, or by the Board of
Directors of the Company:
53
11.2.1 The Administrative Committee shall be responsible for the
administration of the Plan and shall have the exclusive right,
responsibility and authority with respect to the construction,
interpretation, application or administration of the Plan and
eligibility for Plan benefits except for those matters which are the
responsibility of the Investment Committee.
11.2.2 The Investment Committee shall be responsible for making
appropriate provision for the investment and reinvestment of the
Trust Fund and shall have the exclusive right, responsibility and
authority with respect thereto.
11.2.3 Each Committee shall have all powers necessary or helpful
for the carrying out of its responsibilities, and the decisions or
actions of such Committee in good faith in respect of any matter
hereunder shall be final, conclusive and binding upon all parties
concerned, including, without limitation, any and all Employees,
Participants, Spouses, Beneficiaries, heirs, distributees, estates,
executors, administrators and assignees. Any determination made by a
Committee shall be given deference in the event it is subject to
judicial review and shall be overturned ordy if it is arbitrary and
capricious.
11.2.4 Each Committee may delegate to one or more of its the
right to act on its behalf in any one or more matters connected with
the administration of the Plan.
11.2.5 Without limiting the generality of the foregoing, the
Administrative Committee shall have the power:
11.2.5.1 To make rules and regulations for the
administration of the Plan which are not inconsistent with the
terms and provisions of the Plan;
54
11.2.5.2 To construe all terms, provisions, conditions and
limitations of the Plan, or determine eligibility for benefits;
11.2.5.3 To determine all questions arising out of or in
connection with the provisions of the Plan or its administration
in any and all cases in which the Administrative Committee deems
such a determination advisable, including, without limitation,
the power to resolve ambiguities, to rectify errors, and to
supply omissions;
11.2.5.4 To establish procedures for determining the
validity of any qualified domestic relations order and for
complying with any such valid order.
The foregoing list of powers is not intended to be either complete or
exclusive, and each Committee shall, in addition, have such powers as it may
determine to be necessary for the performance of its duties under the Plan and
the Trust Agreement.
11.3 Liability Limited and Indemnification. Except as otherwise
provided by law, no person who is a member of a Committee or who is an
employee, officer and/or director of an Employer or Affiliate, shall incur any
liability whatsoever on account of any matter connected with or related to the
Plan or the administration of the Plan, unless such person shall have acted in
bad faith, or have willfully neglected his duties, in respect of the Plan. The
Company shall indemnify and save each such person harmless against any and all
loss, liability, claim, damage, cost and expense which may arise by reason of,
or be based upon, any matter connected with or related to the Plan or the
administration of the Plan (including, but not limited to, any and all expenses
whatsoever reasonably incurred in investigating, preparing or defending against
any
55
litigation, commenced or threatened, or in settlement of any such claim
whatsoever) to the fullest extent permitted under the Certificate of
Incorporation and By-laws of the Company.
11.4 Quorum and Voting, Procedures. A majority of the members of a
Committee at the time in office shall constitute a quorum for the transaction
of business. Each Committee shall select from among its members a Chairman, and
shall appoint (from its members or otherwise) a Secretary. Each Committee may
act by vote or consent of the majority of its members then in office and may
establish its own procedures. Each Committee may authorize any one or more of
its members or the Secretary of the Committee to sign and deliver any
instrument, certificate or other paper or document on its behalf.
11.5 Subcommittees. Counsel and Agents. Each Committee may appoint
from its members such subcommittees (of one or more such members), with such
powers, as such Committee shall determine. Each Committee may employ such
counsel (including legal counsel, who may be counsel for an Employer or
Affiliate) and agents and such clerical and other services as it may require in
carrying out the provisions of the Plan, and may charge the fees, charges and
costs resulting from such employment as an expense to the Company. Unless
otherwise required by law, persons employed by a Committee as counsel, or as
its agents or otherwise, may include members of either Committee, or of the
Board or Boards of Directors of an Employer or Affiliate, or firms with which
members of either Committee or Board or Boards of Directors of any Employer or
Affiliate are associated as partners, employees or otherwise. Persons serving
on a Committee or on any such subcommittee shall be fully protected in acting
or refraining from acting in accordance with the advice of legal or other
counsel.
56
11.6 Reliance on Information. The members of each Committee and any
Employer and Affiliate and their respective officers, directors and employees,
shall be entitled to rely upon all tables, valuations, certificates, opinions
and reports furnished by any actuary, accountant, trustee, insurance company,
counsels physician or other expert who shall be engaged by either Committee, an
Employer or Affiliate, and the members of each Committee and any Employer and
Affiliate and their respective officers, directors and employees, shall be
fully protected in respect of any action taken or suffered by them in good
faith in reliance thereon, and all action so taken or suffered shall be
conclusive upon all persons affected thereby.
11.7 Instructions to Trustee. The Administrative Committee shall
provide appropriate written instructions in accordance with the Trust Agreement
to enable the Trustee to make the distributions provided for in the Plan.
11.8 Fiduciaries. The provisions of this Section 11.8 shall apply
notwithstanding any contrary provisions of the Plan or of the Trust Agreement.
11.8.1 Named Fiduciaries. The named fiduciaries under the Plan
shall be (a) the Administrative Committee, which shall have authority
to control and manage the operation and administration of the Plan,
except with respect to those matters which under the Plan or the
Trust Agreement are the responsibility, or subject to the authority,
of the Investment Committee, and (b) the Investment Committee, which
shall be the named fiduciary with respect to control or management of
the assets of the Plan.
11.8.2 Allocation of Fiduciary and Other Responsibilities. Each
Committee shall have the right, which shall be exercised in
accordance with the procedures set forth in the Plan or in the Trust
Agreement for action by such Committee, to allocate
57
responsibilities (fiduciary or otherwise) among it and the other
Committee, and each Committee shall have the right to designate
persons other than such Committees to carry out responsibilities
(fiduciary or otherwise) under the Plan.
11.8.3 Funding Policy. The funding policy and method for this
Plan shall consist of the making of contributions, the making of
investments and reinvestments in respect thereof, and the making of
withdrawals and distributions, as provided in the provisions of the
Plan.
11.8.4 Service in Multiple Capacities. Any person or group of
persons may serve in more than one fiduciary capacity with respect to
the Plan.
11.8.5 Advisers. Each Committee, and any fiduciary designated by
a Committee pursuant to Section 11.8.2 above to whom such power is
granted by a Committee, may employ one or more persons to render
advice with regard to any responsibility such fiduciary has under the
Plan.
11.8.6 Investment Manager. The Investment Committee may appoint
an investment manager or managers, as defined in ERISA, to manage
(including the power to acquire, invest and dispose of) any assets of
the Plan.
11.8.7 Limitation of Liability. Except to the extent otherwise
provided by law, if any duty or responsibility of a named fiduciary
has been allocated or delegated to any other person in accordance
with any provision of this Plan or of the Trust Agreement, then such
named fiduciary shall not be liable for any act or omission of such
person in carrying out such duty or responsibility.
58
11.9 Genuineness of Documents. Each Committee, and any Employer and
Affiliate and their respective officers, directors and employees, shall be
entitled to rely upon any notice, request, consent, letter, telegram or other
paper or document believed by them or any of them to be genuine, and to have
been signed or sent by the proper person, and shall be fully protected in
respect of any action taken or suffered by them in good faith in reliance
thereon.
11.10 Proper Proof. In any case in which an Employer or any Committee
shall be required under the Plan to take action upon the occurrence of any
event, they shall be under no obligation to take such action unless and until
proper and satisfactory evidence of such occurrence shall have been received by
them.
11.11 Claims Procedure. The Administrative Committee shall establish a
claims procedure in accordance with applicable law and shall afford a
reasonable opportunity to any Participant whose claim for benefits has been
denied for a full and fair review of the decision denying such claim.
11.12 Filing with Committee. For all purposes of this Plan, the date
on which an Appropriate Form, Participation Agreement, or any other document is
deemed to be returned to or filed with the Administrative Committee shall be
the date on which such Appropriate Form, Participation Agreement or other
document is actually received by the Administrative Committee or its designated
agent.
11.13 Plan Administrator. The Company shall be the administrator of
the Plan, as defined in section 3(16)(A) of ERISA.
59
ARTICLE 12
Trust Agreement
12.1 Trust Agreement. As part of the Plan, the Company shall enter
into a Trust Agreement or agreements under which the Trustee shall receive the
contributions of the Employers and Participants to the Trust Fund and shall
hold, invest and distribute the Trust Fund in accordance with the terms and
provisions of the Trust Agreement. Any and all rights or benefits which may
accrue to any person under the Plan shall be subject to all the terms and
provisions of the Trust Agreement.
12.2 Investment in Interest-Bearing Deposits. If the Trustee shall be
a bank or similar financial institution supervised by the United States or any
State thereof, the Investment Committee, in its discretion, may authorize the
Trustee to invest all or a part of the Plan's assets in deposits which bear a
reasonable interest rate in such bank or financial institution.
12.3 Company as Agent. The Company is hereby authorized to act as
agent for all other Employers in dealings with the Trustee under the Plan.
60
ARTICLE 13
Amendment or Merger
13.1 Right Reserved. Subject to the further provisions of this Article
13 the Company may, by resolution of the Board of Directors, amend the Plan in
whole or in part at any time or from time to time, by resolution of the
Company's Board of Directors or action by its Executive Committee. Any such
amendment shall be evidenced in writing. No amendment shall divest any
Participant of any amount credited to him under the Plan except as provided in
Section 13.2 or as otherwise permitted by law. No amendment shall vest in an
Employer, directly or indirectly, any interest in or ownership or control of
any part of the Trust Fund.
13.2 Amendments Required for Qualification. etc. All provisions of the
Plan and all benefits and rights granted under the Plan are subject to any
amendments, modifications or alterations that may be necessary or advisable
from time to time to qualify the Plan under the Code, to continue the Plan as
so qualified, or to comply with any other provision of law. Accordingly,
notwithstanding any other provision of the Plan, the Company may, by resolution
of the Board of Directors, amend, modify or alter the Plan with retroactive
effect in any respect or manner necessary or advisable to qualify the Plan
under the Code or to continue the Plan as so qualified, or to comply with any
other provision of applicable law.
13.3 Contributions Following Amendment. If the Plan is amended in any
respect, no Employer shall have any liability or obligation to make any
contribution or payment to the Trust Fund except in such manner and amounts as
may be specifically provided for in the Plan as so amended.
61
13.4 Merger. Subject to the provisions of this Section 13.4, the Plan
may be amended to provide for the merger of the Plan, in whole or in part, or a
transfer of all or a part of its assets, to any other qualified plan within the
meaning of section 401(a) or 403(a) of the Code, including such a merger or
transfer in lieu of a distribution which might otherwise be required under the
Plan. The Plan shall not be merged or consolidated with, nor may its assets or
liabilities be transferred to, any other plan in whole or in part, unless each
Participant would be entitled to a benefit immediately after the merger,
consolidation or transfer (if such other plan then terminated) which is equal
to or greater than the benefit he would have been entitled to receive
immediately before the merger, consolidation or transfer (if the Plan had then
been terminated).
62
ARTICLE 14
Termination of the Plan
14.1 Right Reserved. The Company reserves the right at any time, by
resolution of its Board of Directors, to terminate the Plan, in whole or in
part, by resolution of the Company's Board of Directors or action by its
Executive Committee. Any such termination shall be evidenced in writing. If the
Plan is terminated, no Employer shall have any liability or obligation to make
any contribution or payment to the Trust Fund with respect to any period after
the date of such termination. Any such termination shall be evidenced in
writing.
14.2 Vesting Upon Termination. Upon the termination or partial
termination of the Plan (within the meaning of section 41 l(d)(3) of the Code)
or the complete discontinuance of all contributions under the Plan, the rights
of all affected employees to their Accounts as of the date of such termination
or partial termination shall be nonforfeitable.
14.3 Termination of Trust. If the Plan is terminated pursuant to
Section 14.1 and the Board of Directors determines that the Trust Fund shall be
terminated, the Trust Fund shall be revalued as if the termination date were a
Valuation Date, and the current value of all Accounts shall be distributed in
accordance with Articles 8 and 9, as if such Plan termination were a
Termination of Employment; provided, however, that the value of such Accounts
shall be adjusted to reflect the expenses of termination to the extent such
expenses are not paid by the Company. Until all Accounts are fully distributed,
any remaining Accounts held in the Trust Fund shall continue to be adjusted in
accordance with Article 4, and to reflect the expenses of termination.
63
14.4 Continuation of Trust. If the Plan is terminated by the Board of
Directors but the Board of Directors determines that the Trust Fund shall be
continued, no further contributions shall be made by the Employers, but the
Trust Fund shall be administered as though the Plan were otherwise in fill
force and effect. If the Trust Fund is subsequently terminated, the provisions
of Section 14.3 shall then apply.
14.5 Withdrawal of Subsidiary or Affiliate. The withdrawal of an
Affiliate as an Employer by reason of a sale or other disposition of the stock
or assets of such Affiliate shall not be deemed a complete or partial
termination or a complete discontinuance of contributions if following such
sale or disposition the successor to such Employer adopts or maintains a
comparable plan.
64
ARTICLE 15
Miscellaneous
15.1 Payment to a Minor or Incompetent. If any amount is payable
hereunder to a minor or other legally incompetent person, such amount may be
paid in any one or more of the following ways, as the Administrative Committee
in its sole discretion shall determine:
15.1.1 To the legal representative of such minor or other
incompetent person, if the Administrative Committee has been notified
of the appointment of such representative; or
15.1.2 To a parent or guardian of such minor or other
incompetent person, or to the person with whom such minor or other
incompetent person resides; or
15.1.3 To a custodian for such minor under the Uniform Gifts to
Minors Act (or similar statute) of any jurisdiction; or
15.1.4 If none, directly to such minor or other incompetent
person. Payment to any person in accordance with the foregoing
provisions of this Section 15.1 shall, to that extent, discharge all
Employers, the members of the Administrative Committee, the Trustee
and any person or corporation making such payment pursuant to the
direction of the Administrative Committee, and none of the foregoing
shall be required to see to the proper application of any such
payment to such person pursuant to the provisions of this Section
15.1. Without in any manner limiting or qualifying the provisions of
this Section 15.1, if any amount is payable hereunder to a minor or
any other legally
65
incompetent person, the Administrative Committee may in its
discretion institute the procedures which are available to it under
Section 15.2.
15.2 Doubt as to Right to Payment. If at any time any doubt exists as
to the right of any person to any payment under the Plan or as to the amount or
time of such payment (including, without limitation, any case of doubt as to
identity and any case in which any notice has been received from any other
person claiming any interest in amounts payable under the Plan or a claim for
other persons may exist by reason of community property or similar laws), the
Administrative Committee shall be entitled, in its discretion, to direct the
Trustee to hold such sum as a segregated amount in trust until such right or
amount or time is determined or an order of a court of competent jurisdiction
is obtained, to pay such sum into court in accordance with appropriate rules of
law in such case then provided, or to make payment only upon receipt of a bond
or similar indemnification (in such amount and in such form as is satisfactory
to the Administrative Committee).
15.3 Spendthrift Clause. Except as may be other- wise required by law,
or provided by this Plan, no benefit or payment under the Plan shall be subject
in any manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance or charge, whether voluntary or involuntary, and no attempt so to
anticipate, alienate, sell, transfer, assign, pledge, encumber or charge the
same shall be valid, nor shall any such benefit or payment be in any way liable
for or subject to the debts, contracts, liabilities, engagements or torts of
any person entitled to such benefit or payment, or subject to attachment,
garnishment, levy, execution or other legal or equitable process.
Notwithstanding the foregoing, benefits under the Plan shall be subject to the
provisions of a qualified domestic relations order.
66
15.4 Voting and Disposition of Revlon Stock. Each Participant shall
have the right to direct the Trustee as to the manner in which to vote and to
exercise tender, exchange offer or similar rights as to any shares of Revlon
Stock allocated to his Post-IPO Matching Contributions Account. The Company
shall furnish the Trustee and the Participants with notices and information
statements when voting, tender or such other rights are to be exercised, in
such time and manner as may be required by applicable law and the Certificate
of Incorporation and By-Laws of Revlon, Inc. Such statements shall be
substantially the same for Participants as for holders of Revlon Stock in
general. The Trustee shall vote, tender or exercise such rights with respect to
such Revlon Stock in accordance with the direction of the Participant. If no
direction is received from the Participant by the Trustee within an
administratively practicable time prior to the date on which action is
required, the Trustee shall take action with respect to those shares in
accordance with the direction of the Investment Committee.
15.5 Additional Action. Notwithstanding any other provision of the
Plan or the Trust Agreement, the Investment Committee shall be the sole named
fiduciary with respect to the control and management of the Revlon Stock Fund,
except as provided in Section 15.4; and the Trustee shall have no authority or
responsibility with respect to such control or management. Without limiting the
generality of the foregoing, if for any reason the provisions of Section 15.4
can no longer be validly applied, the Investment Committee shall direct the
Trustee with respect to all matters and all actions affecting the assets of the
Revlon Stock Fund.
15.6 Benefits Payable Only from Trust Fund. All benefits under the
Plan shall be paid or provided for solely from the Trust Fund, and neither the
Employers, their directors or employees nor any member of any Committee shall
have any liability or responsibility therefor. Except as otherwise provided by
law, no Employer assumes any obligations under the Plan except those
specifically set forth in the Plan.
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15.7 Estoppel of Participants and Their Beneficiaries. The Employers,
the Committees and Trustee may rely upon any certificate, statement or other
representation made to them by any Employee, Participant, Spouse, or
Beneficiary with respect to age, length of service, leave of absence, date of
cessation of employment or other fact required to be determined under any of
the provisions of the Plan and shall not be liable on account of the payment of
any moneys or the doing of any act in reliance upon any such certificate,
statement or other representation. Any such certificate, statement or other
representation made by an Employee, Participant or Spouse of a Participant or
Employee shall be conclusively binding upon such Employee, Participant and
Spouse and the Beneficiary of such Participant; and such Employee, Participant,
Spouse or Beneficiary shall thereafter and forever be estopped for disputing
the truth and correctness of such certificate, statement or other
representation. Any such certificate, statement or other representation made by
a Participant's Beneficiary shall be conclusively binding upon such
Beneficiary, and such Beneficiary shall thereafter and forever be estopped from
disputing the truth and correctness of such certificate, statement or other
representation.
15.8 Plan to Be Available for Inspection. A copy of the Plan and of
all amendments thereto, if any, shall be available for inspection at all
reasonable times by Eligible Employees and Participants at the office of the
Company and at such other locations (if any) as may be required by law.
15.9 No Diversion of Trust Fund. At no time prior to the satisfaction
of all liabilities with respect to Participants and their Spouses and
Beneficiaries under the Plan shall any part of
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the Trust Fund be (within the taxable year or thereafter) used for or diverted
to purposes other than the exclusive benefit of the Participants and their
Spouses and Beneficiaries or the payment of the expenses of the administration
of the Plan and of the Trust; provided, however, that:
15.9.1 A contribution that is made by an Employer by a mistake
of fact shall be returned to such Employer upon its request within
one year after the payment of the contribution;
15.9.2 A contribution that is conditioned upon its deductibility
under section 404 of the Code shall be returned to the contributing
Employer upon its request, to the extent that the contribution is
disallowed as a deduction, within one year after such disallowance;
and
15.9.3 A contribution that is conditioned on initial
qualification of the Plan under section 401 of the Code may, if the
Plan does not qualify, be returned (along with any earnings thereon)
to the contributing Employer within one year after the date of denial
of qualification of the Plan.
15.10 Limitation of Liability. Subject to Section 11.3, no liability
shall attach to or be incurred by any stockholder, officer or director of an
Employer or any Affiliate under or by reason of the terms, conditions and
provisions contained in the Plan or in the Trust Agreement or for the acts or
decisions taken or made thereunder or in connection therewith; and as a
condition precedent to his participation in the Plan or the receipt of benefits
thereunder, or both, such liability, if any, is expressly waived and released
by each Participant, Spouse or Beneficiary, and by any and all persons claiming
under or through such persons, such waiver and release to be
69
conclusively evidenced by any act or participation in or the acceptance of
benefits or the making of elections under the Plan.
15.11 Usage. Whenever applicable the masculine gender, when used in
the Plan, shall include the feminine gender, and the singular shall include the
plural.
15.12 Separability. If any provision of the Plan is held invalid or
unenforceable, its invalidity or unenforceability shall not affect any other
provision of the Plan, and the Plan shall be construed and enforced as if such
provision had not been included herein.
15.13 Captions. The captions contained herein and in the table of
contents prefixed thereto are inserted only as a matter of convenience and for
reference and in no way define, limit, enlarge or describe the scope or intent
of the Plan, and they shall not in any way affect the Plan or the construction
of any provision thereof.
15.14 Statutory References. References in this Plan to a section or
other provision of the Code or ERISA shall be deemed to refer to such section
or provision as it may be amended from time to time, or to equivalent
provisions of subsequent law.
15.15 Governing Law. This Plan shall be governed in all respects under
the laws of the State of Maryland (without regard to its laws on conflict of
laws) to the extent not governed by XXXXX.
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ARTICLE 16
Leased Employees
16.1 Definitions. For purposes of this Article 16, the term "Leased
Employee" means any person performing services for an Employer or Affiliate
(hereinafter referred to as the "Recipient") pursuant to an Agreement between
the Recipient and any other person (hereinafter referred to as the "Leasing
Organization"), who has performed such services for the Recipient (including
persons related to the Recipient within the meaning of section 414(n)(6)(A) of
the Code) on a substantially full- time basis for a period of at least one
year, if such services are of a type historically performed by employees in the
business field of the Recipient. For this purpose, a person is considered to
have performed services on a substantially full-time basis for a period of at
least one year if: (1) during any consecutive 12-month period such person has
performed at least 1,500 hours of service for the Recipient, or (2) during any
consecutive 12-month period such person performs services for the Recipient for
a number of hours of service at least equal to seventy-five percent (75%) of
the average number of hours that are customarily performed by an employee of
that Recipient in the particular position.
16.2 Treatment of Leased Employees. For purposes of this Plan, a
Leased Employee's service for the Recipient (including Service during the
one-year period referred to in Section 16.1 and Service prior to the effective
date of this Article 16) is to be taken into account in determining compliance
with the Service requirements of the Plan relating to participation and
vesting. However, the Leased Employee shall not be entitled to share in
contributions (or forfeitures applied in lieu thereof) under the Plan with
respect to any Service or Compensation
71
attributable to the period during which he is a Leased Employee, and shall not
be eligible to become a Participant eligible to receive contributions under the
Plan unless and except to the extent that he shall at some time, either before
or after his Service as a Leased Employee, qualify as an Eligible Employee
without regard to the provisions of this Article 16.
16.3 Exception for Employees Covered by Plans of Leasing Organization.
Section 16.2 shall not apply to any Leased Employee if: (i) such employee is
covered by a money purchase pension plan of the Leasing Organization which
provides (a) a nonintegrated employer contribution rate of at least ten percent
(10%) of compensation as defined in section 415(c) of the Code, but including
amounts contributed by the Recipient pursuant to a salary reduction agreement
which are excludable from the Leased Employee's gross income under sections
125, 402(e)(3), section 402(h) or 403(b) of the Code, (b) immediate
participation, and (c) full and immediate vesting; and (ii) Leased Employees do
not constitute more than twenty (20) percent of the Recipient's work force who
are not Highly Compensated Employees.
16.4 Effective Date. The provisions of this Article 16 are effective
as of January 1, 1984, and no individual shall be eligible to become a
Participant or accrue benefits under this Plan for any period prior thereto by
reason of anything in this Article 16.
16.5 Construction. The purpose of this Article 16 is to comply with
the provisions of section 414(n) of the Code. All provisions of this Article
shall be construed consistently therewith, and, without limiting the generality
of the foregoing, no individual shall be treated as a Leased Employee except as
required under such Code section.
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ARTICLE 17
Limitation on Maximum Benefits and Contributions Under All Plans
17.1 Section 415 Limitations. Effective January 1, 1984, and
notwithstanding any other contrary provisions of this Plan, the "annual
additions" which may be credited to any Participant's accounts for any
"limitation year" will not exceed the permissible limitations of section 415 of
the Code. For purposes of applying such limits, section 415 of the Code and
Treasury regulations thereunder are incorporated herein by reference. It is
intended that any limitation imposed by said section 415 of the Code on the
allocation of contributions and forfeitures to a Participant under this Plan
shall be implemented in accordance with the provisions of this Article 17. The
provisions of this Article 17 shall apply notwithstanding any other contrary
provisions in this Plan.
17.2 Coverage by Defined Benefit Plan.
17.2.1 Reductions in benefits under this Article 17 arising by
reason of a Participant's participation in multiple plans shall,
except as any other such plan may otherwise expressly provide, be
effected as follows: (a) benefits and annual additions under
continuing plans shall be reduced before benefits under any
terminated plan, (b) benefits under defined benefit plans shall be
reduced before any reduction in annual additions under defined
contribution plans, and (c) annual additions under continuing defined
contribution plans shall be reduced in the reverse order in which
such annual additions would otherwise be allocated; provided, that
benefits under multiemployer plans shall be reduced last. Any
resulting required reductions under this Plan shall be made first
73
to Unmatched Contributions, and second, on a pro rata basis, to
Matched Contributions, and the Matching Contribution relating
thereto.
17.2.2 In computing the denominator of the "defined contribution
plan fraction" as defined in section 415(e) of the Code for any year
ending after 1982, the Administrative Committee may elect to
determine the portion of such denominator which relates to 1982 and
prior years under the method described in section 415(e)(6) of the
Code in lieu of the method described above. Such election may be made
at such time and in such manner as may be provided in applicable
Treasury regulations.
17.2.3 In the case of a Participant who would have fewer than
ten (10) Years of Service (including service in the year with respect
to which any determination under this Section 17.2.3 is made) with an
Employer and all Affiliates at the time his retirement pension
starts, the 1.25 and 1.40 limitations referred to in sections
415(e)(2)-(3) of the Code shall be reduced proportionately.
17.3 Limitation Year. All determinations under this Article 17 shall
be made by reference to the calendar year.
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ARTICLE 18
"Top Heavy" Provisions. Etc.
18.1 Determination of "Top Heavy"
18.1.1 For purposes of this Article 18, "Applicable Plans" shall
include (i) each plan of an Employer or Affiliate in which a Key
Employee (as defined in Section 18.1.2 for this Plan, and as defined
in section 416(i) of the Code for each other Applicable Plan) is a
Participant and (ii) each other plan of an Employer or Affiliate
which enables any plan in clause (i) of this sentence to meet the
requirements of section 401(a)(4) or 410 of the Code. Any plan not
required to be included under the preceding sentence also may be
included, at the option of the Company, provided that the
requirements of section 401(a)(4) and 410 of the Code continue to be
met for the group of Applicable Plans after such inclusion.
18.1.2 For purposes of this Article 18, "Key Employee" shall
mean an employee of an Employer or Affiliate who, at any time during
a given Plan Year or any of the four (4) preceding Plan Years, is one
or more of the following:
(A) An officer of an Employer or Affiliate having annual
compensation greater than fifty percent (50%) of the dollar amount
described in section 415(b)(1)(A) of the Code for any such Plan Year;
provided, that the number of employees treated as officers shall be
no more than fifty (50) employees or, if fewer, the greater of three
(3) employees or ten percent (10%) of the employees (including
"Leased Employees" as
75
defined Article 16). For purposes of this subsection, employees
described in section 414(q)(8) of the Code shall be excluded. (B) One
of the ten (10) employees (A) having annual compensation from an
Employer or Affiliate of more than the limitation in effect under
section 415(c)(1)(A), and (B) owning (or considered as owning, within
the meaning of section 318 of the Code applied by substituting five
percent (5%) for fifty percent (50%) in section 318(a)(2)(C)) the
largest interests in an Employer or Affiliate. If two employees have
the same interest in an Employer or Affiliate, the employee having
greater annual compensation from the Employer or Affiliate shall be
treated as having a larger interest.
(C) A person owning (or considered as owning, within the meaning
of section 318 applied by substituting five percent (5%) for fifty
percent (50%) in section 31 8(a)(2)(C)), more than five percent (5%)
of the outstanding stock of an Employer or Affiliate that is a
corporation, or stock possessing more than five percent (5%) of the
total combined voting power of all stock of an Employer or Affiliate
(or having more than five percent (5%) of the capital or profits
interest in any Employer or Affiliate that is not a corporation,
determined under similar principles).
(D) A one-percent (1%) owner of an Employer or Affiliate having
aggregate annual compensation from all Employers or Affiliates of
more than $150,000. "One-percent owner" means any person who would be
described in paragraph (iii) of this Section 18.1.2 if "one percent
(1%)" were substituted for "five percent (5%)" in each place where it
appears in paragraph (iii), except that such substitution shall not
be made in applying section 318(a)(2) of the Code.
76
18.1.3 For the purposes of this Article 18, "annual
compensation" means compensation as defined in section 415(c)(3) of
the Code, but including amounts contributed by an Employer or an
Affiliate pursuant to a salary reduction agreement which are
excludable from the employee's gross income under sections 125,
402(e)(3), 402(h)(1)(B) or 403(b) of the Code.
18.1.4 In any Plan Year starting after 1983 or thereafter during
which the sum, for all Key Employees (as defined in Section 18.1.2
for this Plan and as defined in section 416(i) of the Code for each
other Applicable Plan) if the present value of the cumulative accrued
benefits under all Applicable Plans which are defined benefit plans
(determined based on the actuarial assumptions set forth in the "top
heavy" provisions of such plans) and the aggregate of the accounts
under all Applicable Plans which are defined contribution plans,
exceeds sixty percent (60%) of a similar sum determined for all
participants in such plans (but excluding participants who are former
Key Employees), the Plan shall be deemed "Top Heavy."
18.1.5 For the first Plan Year, the determination as to whether
this Plan is "Top Heavy" shall be made on the last day of such Plan
Year, and for each succeeding Plan Year the determination as to
whether this Plan is "Top Heavy" shall be made on the last day of the
preceding Plan Year (the "Determination Date"); and other plans shall
be included in determining whether this Plan is "Top Heavy" based on
the determination date for each such plan which occurs in the same
calendar year as such determination date for this Plan.
77
18.1.6 A Participant's Accounts under this Plan as of any
determination date shall be determined without regard to amounts
allocated as of that date based on contributions made after such
date.
18.1.7 Subject to Section 18.1.8, distributions from the Plan or
any other Applicable Plan during the 5-year period ending on the
applicable Determination Date shall be taken into account in
determining whether the Plan is "Top Heavy."
18.1.8 For Plan Years beginning on or after January 1, 1985, any
accrued benefit shall not be taken into account with respect to any
individual who has not performed any service at any time during the
5-year period ending on the applicable Determination Date for an
Employer or Affiliate maintaining this Plan or any other Applicable
Plan.
18.1.9 Amounts attributable to rollover contributions or similar
transfers to this Plan or any other Applicable Plan shall not be
taken into account except to the extent provided in applicable
regulations.
18.1.10 The terms "Key Employee" and "Participant" include their
beneficiaries.
18.2 Provisions Applicable in "Top Heavy" Years. For any Plan Year in
which the Plan is deemed to be "Top Heavy," the following provisions shall
apply:
18.2.1 The amount of Employer contributions and forfeitures
which shall be allocated to the account of any active Participant who
(i) is employed by an Employer or Affiliate on the last date of the
Plan Year and (ii) is not a Key Employee shall be (x) at least three
percent (3%) of such Participant's compensation (as defined in
section 415 of
78
the Code) for such Plan Year, or, (y) if less, an amount equal to
such compensation multiplied by the highest contribution rate for any
key employee. For purposes of this Section 18.2.1, the contribution
rate for each individual Key Employee shall be determined by dividing
the contributions and forfeitures allocated to such Key Employee's
account, including amounts allocated under defined contribution plans
required to be aggregated with this Plan to determine whether it is
"Top Heavy;" provided, however, that clause (y) above does not apply
if any such plan enables a defined benefit plan required to be so
aggregated to meet the requirements of section 401(a)(4) or 410 of
the Code. The minimum allocation provisions of this Section 18.2.1
shall, to the extent necessary or appropriate, be deemed satisfied in
whole or in part by benefits to the Participant provided under any
other plan maintained by an Employer or Affiliate (whether or not an
Applicable Plan).
18.2.2 For purposes of complying with the provisions of section
415(e) of the Code, the 1.25 under section 415(e) is reduced to 1.00
unless the following conditions are met:
(i) the percentage described in Section 18.1.4 does not
exceed ninety percent (90%), and
(ii) "four percent (4%)" is substituted for "three percent
(3%)" in Section 18.2.1. Notwithstanding any other provisions of
this Plan, if the sum of the fractions described in sections
415(e)(2) and (3) of the Code as applied to this Plan,
calculated by substituting "100%" for "125%" in each such
section, for any Participant exceeds 100% for the last Plan Year
before the
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Plan becomes "Top Heavy," such fractions shall be adjusted, in
accordance with applicable regulations, so that their sum does
not exceed 100% for such Plan Year.
18.2.3 Six-Year Graded Vesting. Any Participant who has at least
one Hour of Service after the Plan becomes "Top Heavy" shall be
vested in his Matching Contributions Account on a basis at least as
favorable as is provided under the following schedule:
Years of Employment Percentage Vested
------------------- ------------------
Less than 2 0%
2 but less than 3 20%
3 but less than 4 40%
4 but less than 5 60%
5 but less than 6 80%
6 or more 100%
In any Plan Year in which the Plan is not deemed to be "Top Heavy," the minimum
vested percentage shall be no less than that which was determined as of the
last day of the last Plan Year in which the Plan was deemed to be "Top Heavy."
18.2.4 The provisions of Sections 18.2.1 and 18.2.2 shall not
apply to any employee included in a unit of employees covered by a
collective bargaining agreement if retirement benefits were the
subject of good faith bargaining.
18.3 Inapplicability in the Event of Change in Law. In the event that
any provision of this Article 18 is no longer required to qualify this Plan
under the Code, then such provision shall thereupon be void without the
necessity of further amendment of the Plan.
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ARTICLE 19
Termination, etc. Prior to Amendment
Notwithstanding any other provision of this Plan, but subject to any
provision hereof which has an express effective date earlier than January 1,
1989, the benefits (if any) payable in respect of any Participant in the Plan
who retired, terminated employment or died prior to January 1, 1989 shall be
determined under the applicable provisions of the Plan as in effect at the
relevant time or times prior to such date. Any such individual shall be a
Participant under this Plan solely with respect to such benefits, unless he
shall again become a Participant pursuant to the provisions of Article 2
hereof.
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ARTICLE 20
401(k) Deferral and 401(m) Contributions Tests
20.1 Definitions. For the purposes of this Article the following words
shall have the following meanings:
20.1.1 "Elective Deferrals" means elective deferrals within the
meaning of section 402(g)(3) of the Code.
20.1.2 "Excess Aggregate Contributions" means excess aggregate
contributions within the meaning of section 401(m)(6)(B) of the Code.
20.1.3 "Excess Contributions" means excess contributions within
the meaning of section 401(k)(8)(B) of the Code.
20.1.4 "Excess Elective Deferrals" means those Elective
Deferrals that are includible in a Participant's gross income under
section 402(g) of the Code to the extent such Participant's Elective
Deferrals for a taxable year exceed the dollar limitation under such
Code section.
20.2 Maximum Amount of Elective Deferrals. Notwithstanding anything to
the contrary herein, the amount of Elective Deferrals made with respect to any
individual during a calendar year under the Plan and all other plans, contracts
or arrangements of an Employer or an Affiliate may not exceed the amount of the
limitation in effect under section 402(g)(1) of the Code for taxable years
beginning in such calendar year. Such limit shall not apply to any such
Elective Deferrals made which are amounts attributable to service performed by
such Participant prior to January l, 1987.
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20.3 Distribution of Excess Elective Deferrals. A Participant may
assign to the Plan any Excess Elective Deferrals made during a taxable year of
the Participant by notifying the Committee on or before March 1 following the
close of such taxable year of the amount of the Excess Elective Deferrals to be
assigned to the Plan. A Participant is deemed to notify the Administrative
Committee of any Excess Elective Deferrals that arise by taking into account
only those Elective Deferrals made to this Plan and any other plans of his
Employer. Notwithstanding any other provision of the Plan, Excess Elective
Deferrals, plus any income and minus any loss allocable thereto, shall be
distributed no later than April 15 following such taxable year to any
Participant to whose account Excess Elective Deferrals were assigned for the
preceding year and who claims Excess Elective Deferrals for such taxable year.
Excess Elective Deferrals shall be treated as annual additions under the Plan,
unless such amounts are distributed no later than the first April 15 following
the close of the Participant's taxable year.
20.4 Actual Deferral Percentage Test. Pre-Tax Contributions hereunder
shall not exceed the limits set forth in section 401(k)(3) of the Code. For
purposes of applying such limits, section 401(k) of the Code and the Treasury
regulations thereunder are incorporated herein by reference.
20.5 Distribution of Excess Contributions: Recharacterization.
20.5.1 Notwithstanding any other provision of the Plan, Excess
Contributions, plus any income and minus any loss allocable thereto,
shall be distributed no later than the last day of any Plan Year
beginning after December 31, 1987 to Participants to whose Accounts
Pre-Tax Contributions were allocated for the preceding Plan Year. The
Excess Contributions shall be adjusted for income or loss up to the
date of distribution. The income or loss allocable to Excess
Contributions shall be determined by multiplying the income or loss
allocable to the Participant's
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Pre-Tax Contributions for the Plan Year by a fraction, the numerator
of which is the Excess Contribution on behalf of the Participant for
the preceding Plan Year and the denominator of which is the sum of
the Participant's account balances attributable to Pre-Tax
Contributions on the last day of the preceding Plan Year. Amounts
distributed under this Section 20.5.1 shall be made from the
Participant's Pre-Tax Contribution Accounts in proportion to the
Participant's Pre-Tax Contributions for the Plan Year.
20.5.2 A Participant may treat his Excess Contributions as an
amount distributed to the Participant and then contributed by the
Participant to the Plan as Post-Tax Contributions. Such
recharacterized amounts will remain nonforfeitable and subject to the
same distribution requirements as Pre-Tax Contributions. Amounts may
not be recharacterized by a Highly Compensated Employee to the extent
that such amount in combination with other Post-Tax Contributions and
Matching Contributions made by or with respect to that Employee would
exceed any limit under Section 20.6 or section 402(g) of the Code.
Recharacterization must occur no later than two and one-half months
after the last day of the Plan Year in which the Excess Contributions
arose and is deemed to occur no earlier than the date the last Highly
Compensated Employee is informed in writing of the amount which may
be recharacterized and the consequences thereof.
20.6 Actual Contributions Percentage Test.
20.6.1 Matching Contributions and Post-Tax Contributions
hereunder shall not exceed the limits set forth in section 401 (m) of
the Code. For purposes of applying such limits, section 401(m) of the
Code and the regulations thereunder are incorporated herein by
reference.
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20.6.2 Contributions made by or on behalf of Highly Compensated
Employees shall not exceed the limits imposed upon multiple use of
the alternative limitation by section 401(m)(9) of the Code. For this
purpose, section 401(m)(9) of the Code and Treasury regulation
section 401(m)-2(b) are incorporated herein by reference. If one or
more Highly Compensated Employees' contributions exceed the multiple
use limit, then the actual contribution ratio ("ACR") of Highly
Compensated Employees shall be reduced (starting with such Highly
Compensated Employee whose ACR is the highest) so that the limit is
not exceeded. The amount of any such reduction shall be treated as an
Excess Aggregate Contribution. The actual deferral ratio ("ADR") and
ACR of Highly Compensated Employees shall be determined hereunder
after any adjustments required to pass the tests described in
Sections 20.4 and 20.6.1. Multiple use shall not occur if the actual
deferral percentage ("ADP") and the actual contributions percentage
("ACP") (as such terms are defined in the regulations under sections
401(k) and 401(m) of the Code, respectively) of Highly Compensated
Employees is not greater than 125 percent of the ADP and ACP of
Employees who are not Highly Compensated Employees.
20.7 Distribution of Excess Aggregate Contributions. Notwithstanding
any other provision of this Plan, Excess Aggregate Contributions, plus any
income and minus any loss allocable thereto, shall be forfeited, if
forfeitable, or if not forfeitable, distributed no later than the last day of
each Plan Year beginning after December 31, 1987, to Participants to whose
accounts Post-Tax or Company Contributions were allocated for the preceding
Plan Year. The Excess Aggregate Contributions shall be adjusted for income or
loss. The income or loss allocable to Excess Aggregate Contributions shall be
determined by multiplying the income or loss allocable to the Participant's
Post-Tax and Company Contributions for the Plan Year by a fraction, the
85
numerator of which is the Excess Aggregate Contributions on behalf of the
Participant for the preceding Plan Year and the denominator of which is the sum
of the Participant's account balance attributable to Post-Tax and Company
Contributions, and any other employee and matching contributions within the
meaning of section 401(m) of the Code, on the last day of the preceding Plan
Year. Excess Aggregate Contributions shall be distributed from the
Participant's Post-Tax Contribution Account, and forfeited if otherwise
forfeitable under the terms of the Plan (or, if not forfeitable, distributed)
from the Participant's Company Account in proportion to the Participant's
Post-Tax and Company Contributions for the Plan Year. The determination of the
Excess Aggregate Contributions shall be made after first determining the Excess
Elective Deferrals and then determining the Excess Contributions.
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ARTICLE 21
Rollover Contributions
21.1 Rollover Contributions. This Article applies to rollover
contributions made by a Participant to the Plan. The Administrative Committee
may authorize, in its sole discretion, a Participant to contribute any portion
of an "eligible rollover contribution" from another "eligible retirement plan"
(as such terms are defined in Article 22) on the Appropriate Form and in such
manner as the Administrative Committee may prescribe.
21.2 Rollover Account. Any such contribution by a Participant (and any
earnings, losses and expenses attributable thereto) shall be credited to a
separate "Rollover Account" on behalf of such Participant which reflects his
share of the Trust Fund attributable to such rollover contributions.
21.3 Investment Elections. A Participant may, by giving notice on the
Appropriate Form and within such time as the Administrative Committee may
prescribe designate the proportion of his Rollover Account, in any whole
percentage, which shall be allocated to and invested in any Investment Fund.
Any such election shall continue in effect until changed by a new designation
in accordance with the same procedures then in effect for any change in a
Participant's election as to Basic Contributions under Section 4.4, and may be
reallocated by the Participant in accordance with the provisions of Section
4.6.
21.4 Vesting: Withdrawals. Loans. Amounts in each Rollover Account
shall at all times be fully vested and shall not be subject to forfeiture
pursuant to any provision of this Plan. A Participant may withdraw the entire
balance of his Rollover Account in accordance with the
87
provisions of Articles 6 and 7 as applicable to a Participant's Post-Tax
Contribution Account. Amounts in a Participant's Rollover Account shall be
taken into account for all purposes of any loan made to the Participant in
accordance with Section 6.7 and the participant loan program established
thereunder.
21.5 Suspension. The Administrative Committee may suspend the
authorization contained in this Article as to future rollover contributions,
provided, however that any such suspension shall not affect any Participant
rollover contribution to the Plan made prior to such suspension date.
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ARTICLE 22
Direct Rollover
22.1 This Article applies to distributions made on or after January
1, 1993. Notwithstanding any provision of the Plan to the contrary that would
otherwise limit a distributee's election under this Article, a distributed may
elect, at the time and in the manner prescribed by the Administrative
Committee, to have any portion of an eligible rollover distribution paid
directly to an eligible retirement plan specified by the distributed in a
direct rollover.
22.2 Definitions.
22.2.1 Eligible Rollover Distribution. An eligible rollover
distribution is any distribution of all or any portion of the balance
to the credit of the distributed, except that an eligible rollover
distribution does not include: any distribution that is one of a
series of substantially equal periodic payments (not less frequently
than annually) made for the life (or life expectancy) of the
distributed or the joint lives (or joint life expectancies) of the
distributed and the distributee's designated beneficiary, or for a
specified period of ten years or more; any distribution to the extent
such distribution is required under section 401(a)(9) of the Code;
and the portion of any distribution that is not includible in gross
income (determined without regard to the exclusion for net unrealized
appreciation with respect to employer securities).
22.2.2 Eligible Retirement Plan. An eligible retirement plan is
an individual retirement account described in section 408(a) of the
Code, an individual retirement
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annuity described in section 408(b) of the Code, an annuity plan
described in section 403(a) of the Code, or a qualified trust
described in section 401(a) of the Code, that accepts the
distributee's eligible rollover distribution. However, in the case of
an eligible rollover distribution to the surviving spouse, an
eligible retirement plan is an individual retirement account or
individual retirement annuity.
22.2.3 Distributee. A distributed includes an employee or former
employee. In addition, the employee's or former employee's surviving
spouse and the employee's or former employee's spouse or former
spouse who is the alternate payee under a qualified domestic
relations order, as defined in section 414(p) of the Code, are
distributees with regard to the interest of the spouse or former
spouse.
22.2.4 Direct Rollover. A direct rollover is a payment by the
Plan to the eligible retirement plan specified by the distributed.
IN WITNESS WHEREOF, and as evidence of the adoption of this amended
and restated Plan, the Company has caused this instrument to be executed by its
duly authorized officer this 10th day of November, 1997.
THE COSMETIC CENTER, INC.
By: /s/ X. XXXXXX XXXXXX
-------------------------------
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SCHEDULE OF EMPLOYERS
The Cosmetic Center, Inc.
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THE COSMETIC CENTER RETIREMENT PLAN
Participant Loan Program
1. Participant Loans Authorized. Upon the application of a Participant at any
time prior to the Participant's termination of employment, the Administrative
Committee may, in its sole discretion, instruct the Trustee to make one or more
loans to such Participant from the Trust Fund, effective as soon as practicable
after the Administrative Committee shall receive such application (or in
accordance with such other procedures as the Administrative Committee may
prescribe); provided that such loan meets the requirements of this Program.
Loans made pursuant to this Program and payments thereof, including loan
expenses, as described below, shall be appropriately charged and credited
against first, the Participant's Basic Account, second, his Pre-IPO Matching
Contributions Account third, his Post-IPO Matching Contributions Account
fourth, his Company Matching Account fifth, his Company Stock Matching
Contributions Account and sixth, his Rollover Account. The loan request shall
be made on an Appropriate Form and within such time and pursuant to such manner
as the Administrative Committee may prescribe. The Administrative Committee
shall notify the Participant in writing within a reasonable time of the
approval or denial of such loan request. If a Participant obtains a loan under
this Program, his status as a Participant in the Plan and his rights with
respect to his Plan benefits shall not be affected, except to the extent that
the Participant has assigned his interests in his Accounts pursuant to Section
2. A Participant taking a loan pursuant to this Program shall not be eligible
to take another such loan more than once within any full twelve (12) calendar
month period following the date that such loan is approved; provided, however,
that the Administrative Committee may Adopt rules
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permitting more frequent loans, for example, where the Participant certifies in
writing to the Administrative Committee that the loan proceeds are to be used
to acquire a dwelling unit which, within a reasonable period of time, is to be
used as the principal residence of such Participant. A Participant shall not be
eligible to have more than two loans under this Program outstanding at any
time. All loans shall be granted according to rules applicable to all
participants on a uniform and nondiscriminatory basis.
2. Loan Requirements. A loan shall not be made to a Participant
pursuant to Section 1 unless such loan meets all of the following requirements:
2.1 Amount. Such loan must be in an amount that is not less than
one thousand dollars ($1,000), and not more than the lesser of (a)
fifty thousand dollars ($50,000), or (b) fifty percent (50%) of the
sum of the Participant's Basic Account and vested Pre-IPO Matching
Contributions Account, Post-IPO Matching Contributions Account,
Company Matching Account, Company Stock Matching Contributions
Account and Rollover Account at the time of the loan. In determining
the maximum amount of a loan under this Section 2.1, there shall be
added to any loan amount requested, the excess (if any) of the
highest outstanding balance of loans during the one-year period
ending on the day before the date on which such loan is made over the
outstanding balance on that date of all loans made to the Participant
from this Plan and from all other "qualified employer plans" (as
described in section 72(p)(4) of the Code) which are maintained by
the Company or any Employer or Affiliate referred to in section
72(p)(2)(D) of the Code. If any outstanding balance of a loan (other
than a loan made under this Program) is required to be taken into
account under the preceding sentence, the value of the Participant's
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vested interest under the plan from which such loan was made shall
also be taken into account under clause (b) of the first sentence of
this Section 2. 1.
2.2 Adequate Security. Such loan must be adequately secured by
an amount equal to fifty percent (50%) of the present value of the
Participant's vested interest in the Plan at the time of the loan and
such other or additional security as the Administrative Committee may
in its sole discretion require. The loan shall be secured first by
amounts in the Participant's Basic Account, second, by his Pre-IPO
Matching Contributions Account and, third, by his Post-IPO Matching
Contributions Account.
2.3 Interest. Such loan must bear interest, payable at annual
intervals (or more frequent intervals, if the Administrative
Committee so requires), at a reasonable rate as determined by the
Investment Committee from time to time in a nondiscriminatory manner
for such loans entered into for the relevant period and shall
otherwise conform to the repayment terms set forth in this Program.
2.4 Repayment Terms. The principal amount of any loan made
pursuant to this Program must be payable upon the earlier of the
following dates: (a) the expiration of a fixed term to be determined
by the Administrative Committee but not to exceed five (5) years from
the date of the loan, unless the Participant certifies in writing to
the Administrative Committee that the loan proceeds are to be used to
acquire a dwelling unit which, within a reasonable period of time, is
to be used as the principal residence of such Participant, in which
case, the loan shall be repaid over a period not to exceed ten years
from the date of such loan; and (b) the date on which distribution is
made or otherwise commences following the Participant's Termination
of Employment. Such repayment shall be made in substantially level
installments of principal and
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interest which the Participant shall authorize to be paid, to the
extent practicable, by payroll deductions, which payroll deductions
shall not exceed 15% of the Participant's salary per pay period.
Notwithstanding the foregoing, a Participant shall have the right to
repay all of such principal and/or interest amount without penalty at
any time. In the event of default, foreclosure on the note and
attachment of security will not occur until a distributable event
occurs in the Plan.
2.5 Promissory Note and Loan Agreement. A loan granted pursuant
to this Program shall be evidenced by a promissory note as contained
in an Appropriate Form executed by the Participant and containing
such terms and provisions as the Committees shall determine. Such
loan must also be made pursuant to a loan agreement executed by the
Participant on an Appropriate Form containing such terms and
provisions as the Committees shall determine. The occurrence of any
event of default under the loan note shall entitle the Trustee of the
Plan to reduce the balance of the Participant's Accounts up to the
amount of the Plan's security interest therein. The loan note shall
be an asset solely of the borrowing Participant's Accounts and
interest on the loan shall be credited to his Accounts.
3. Loan Expenses. Any fees, taxes, charges or other expenses
(including without limitation any asset liquidation charge or similar
extraordinary expense) incurred in connection with a loan shall be charged
against the Accounts of the Participant obtaining such loan.
4. Loan Fund. Prior to receiving the proceeds of a loan, the
Participant shall direct that funds in an amount equal to the loan amount be
transferred from the Participant's Accounts in which it is invested, in a
proportion elected by the Participant, to a special loan fund established by
the Investment Committee (consisting solely of that Participant's loans)
established for
95
purposes of disbursing the loan amount to the Participant. Any such transfer
shall be disregarded for purposes of any transfer limitations under Program of
the Plan.
5. Source of Funds. Any Participant who enters into an agreement to
effect a Participant loan shall be deemed to have redesignated his existing
Accounts balances in a manner similar to that provided for in Section 5.6 of
the Plan, so that an amount equal to the initial amount of any such Participant
loan is invested in the Participant's loan fund immediately coincident with the
effective date of such Participant loan. Amounts redesignated in accordance
with the preceding sentence shall be charged against each Investment Fund (to
the extent available) that the Participant's Accounts are then invested in on a
pro rata basis, except as the Participant may otherwise direct.
6. Reallocation to Other Investment Funds. Payments of principal and
interest on a Participant's loan shall be initially deposited in the
Participant's loan fund for allocation to such Participant's Accounts and shall
be reallocated as soon as administratively practicable following such deposit
to such other Investment Fund or Funds as the Participant shall have then
designated for investment of his Basic Account in accordance with the
provisions of Section 5.4 of the Plan or as otherwise directed by the
Participant.
7. Suspension. Notwithstanding any other provision of this Plan, the
Administrative Committee may suspend the authorization contained in this
Program as to future Participant loans, provided, however that any such
suspension shall not affect any Participant loan then outstanding.
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8. Compliance with Applicable Laws. The Committees shall take actions
as they, upon the advice of counsel, may deem appropriate in order to assure
full compliance with all applicable laws and regulations relating to
Participant loans and the granting and repayment thereof.
9. Loans Available on Nondiscriminatory Basis.
(a) All loans made pursuant to this Program shall be made
available to all Participants on a reasonably equivalent,
nondiscriminatory basis.
(b) Notwithstanding the preceding provisions of this Program,
loans may be made to a Participant who is, at the time of the loan,
both a former employee and a "party in interest" as defined in
section 3(14) of ERISA with respect to the Plan. In the case of any
such loan, the preceding provisions of this Program dealing with
payment by payroll deduction and acceleration on termination of
employment shall not be applicable. The provisions of this Section
9(b) shall apply only if and to the extent required by ERISA section
408 or Code section 4975.
(c) Loans shall not be made available to highly compensated
employees (as defined in Code section 414(q)) in an amount greater
than the amount made available to other employees.
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